Metaplanet Uses Net Interest Income to Expand Bitcoin Holdings
Japanese investment firm Metaplanet has unveiled a new net interest income strategy to boost its Bitcoin (BTC) holdings and dividend payments. The company plans to invest capital in income-generating assets, using the resulting net interest to accumulate more Bitcoin and support dividends. This move aligns with Metaplanet's revised capital allocation policy, which allows 10% to 15% of assets to be directed toward strategic investments, including mergers, acquisitions, and interest-bearing assets. Bitcoin remains the core treasury reserve asset, accounting for 85% to 90% of total assets.
The strategy comes amid shareholder concerns about governance and capital structure. On Friday, Metaplanet issued corrected securities filings to clarify that CEO Simon Gerovich does not hold majority voting rights in MMX Ventures, a shareholder in the company. Pseudonymous shareholder Bitcoin Pharaoh criticized the corrections, urging Metaplanet to disclose the ownership of MMX Ventures and clarify Gerovich's 23.8% stake. Metaplanet's share price has risen over 5.6% in the past five trading days, partially recovering from a 26% year-to-date decline.
In early September, Metaplanet faced criticism for expanding its Series 10 executive stock option pool. The company initially expanded the pool from 46 million to 319.5 million shares but later reduced it by 41%, cutting 131.3 million potential shares. This adjustment extinguished over $220 million in warrant value and increased Bitcoin per fully diluted share by about 8.8%. However, asset manager VanEck argued that the shareholder dilution had already occurred and urged Metaplanet to reverse the additional shares.
Metaplanet's market to Bitcoin NAV (mNAV) ratio remains below 1, indicating that the company trades at a discount. At Monday’s close in Tokyo, Metaplanet traded at 0.80x its Bitcoin NAV, meaning investors pay $0.80 for every $1 of Bitcoin it owns. An mNAV reading below 1 makes it more difficult for the company to raise capital and issue new shares to purchase more cryptocurrency.