Metaplanet Shifts Strategy with 15% of Assets Moving Beyond Bitcoin
Metaplanet, the Tokyo-based company, holds a significant position in the cryptocurrency market with 44,000 Bitcoin (BTC). Despite this substantial holding, its stock market valuation remains lower than the value of its Bitcoin assets. On Monday, Metaplanet revised its internal rules to allow up to 15% of its assets to be allocated to ventures beyond Bitcoin. Since April 2024, the company has focused on accumulating Bitcoin using investor funds. However, this new adjustment means that only about 85% to 90% of its assets will continue to be invested in Bitcoin.
The remaining 15% of Metaplanet's assets will serve three main purposes. First, it will fund potential takeovers. Second, it will be used to purchase income-paying securities. Third, it will seed a planned 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. Additionally, the company is exploring a Net Interest Income Strategy, which involves raising money and investing it in assets that yield higher returns than the cost of the funds. Profits from this strategy are intended to purchase more Bitcoin, though the company cautions that results are not guaranteed.
Metaplanet's rules currently prohibit the sale of new shares while the company's valuation is below the value of its Bitcoin holdings. As of Monday, the market valued Metaplanet at 74 cents per dollar of Bitcoin, considering its debt. At the current Bitcoin price of approximately $86,070, Metaplanet's coins are worth around $3.8 billion, while its shares are valued at about $2.1 billion. To fuel growth, the company relies on loans, bonds, and preferred shares that offer fixed dividends to investors. Metaplanet has maintained its borrowing on a Bitcoin-backed credit facility below 10% of the coins' value. In the third quarter, the company sold more Bitcoin than its entire debt, held the cash, and then repurchased more Bitcoin, netting a gain of 1,000 BTC.
Chief Executive Simon Gerovich emphasized the company's ability to convert Bitcoin into cash to meet obligations, stating, 'We answered by doing it.' Metaplanet is now seeking a credit rating, although the Tokyo exchange may still reject its plan to list preferred shares.