Metaplanet Boosts Bitcoin Holdings Amid Income Strategy and Governance Scrutiny

Metaplanet has been making waves with its Bitcoin strategy and governance updates. During Q3, the company sold 10,000 BTC for roughly $790 million, then repurchased 11,000 BTC at around $950 million. This round-trip transaction, aimed at showcasing liquidity, increased its holdings to 44,000 BTC. Despite the sale occurring at a lower price than the repurchase, Metaplanet projects a $97 million deferred tax asset from the capital loss, pending auditor verification.

The firm also introduced a new income strategy, allocating 10% to 15% of its portfolio to revenue-generating assets. These include preferred equity, corporate bonds labeled BitBonds, and a Bitcoin-collateralized credit line. The goal is to capture the difference between the returns on these investments and the cost of financing them. Meanwhile, Bitcoin options trading revenue dropped to $5.4 million in Q3, down from $11.1 million the previous quarter.

Governance concerns have been mounting, particularly after Metaplanet amended regulatory documents to clarify that CEO Simon Gerovich does not have majority voting control over MMX Ventures. A shareholder known as Bitcoin Pharaoh demanded further transparency regarding the beneficial ownership of MMX Ventures. These issues follow a controversial September decision to expand the executive stock option plan, which was later scaled back by 41%. Despite these adjustments, the company's market capitalization-to-Bitcoin NAV ratio remains at 0.80x, indicating a 20% discount to its underlying Bitcoin value.

Shares of Metaplanet have risen about 6% in the past five trading sessions, though they are still down roughly 26% year-to-date. The company now ranks as the second-largest publicly traded corporate Bitcoin holder, trailing only Strategy led by Michael Saylor.