Metaplanet Adjusts Strategy to Diversify 15% of Assets
Metaplanet, a Tokyo-based company, holds 44,000 Bitcoin (BTC), yet its market valuation remains below the value of those coins. On Monday, the company revised its investment strategy, allowing up to 15% of its assets to be allocated outside of Bitcoin. Since April 2024, Metaplanet has focused on acquiring Bitcoin with investor funds, but now approximately 85% to 90% of its assets will remain in Bitcoin.
Chief Executive Simon Gerovich clarified that Bitcoin accumulation was never the sole objective. The new 15% allocation will support three key initiatives: funding takeovers, purchasing income-generating securities, and seeding an investment business. In August, Metaplanet agreed to transfer 2,100 BTC and $2.5 million to Super League Enterprise, a Nasdaq-listed media company, with plans to rename it Superplanet upon approval.
The third initiative involves a Net Interest Income Strategy, which aims to raise money and invest it in assets that yield higher returns than the cost of the borrowed funds. Profits from this strategy are intended to purchase additional Bitcoin, though the company cautions that results are not guaranteed. Metaplanet’s rules prohibit new share sales while its market value is below the value of its Bitcoin holdings.
At the current Bitcoin price of around $86,070, Metaplanet’s coins are valued at roughly $3.8 billion, while its shares are worth about $2.1 billion. The company has relied on loans, bonds, and preferred shares for growth funding, with borrowing on its Bitcoin-backed credit facility kept below 10% of the coins’ value. In the third quarter, Metaplanet sold more Bitcoin than its entire debt, held the cash, and then repurchased more Bitcoin, netting 1,000 BTC.
Gerovich emphasized the company’s ability to convert Bitcoin into cash to meet obligations, addressing concerns from rating agencies and credit investors. Metaplanet now seeks a credit rating, though the Tokyo exchange may still reject its plan to list preferred shares.