Metaplanet's M/NAV Hangover and the Stack's Continued Ascent

Metaplanet, formerly a hotel company, has shifted its focus to become Asia's flagship Bitcoin Treasury Company. The company raised equity at a lower valuation than expected, but still managed to raise funds. The move was strategic, using a "moving-strike" warrants strategy and zero-coupon bonds to achieve the goal. The company's "555 Million Plan" aims to raise $555 million in equity.

Japanese Bitcoin treasury firm Metaplanet has secured shareholder approval to raise up to $884 million through an international share offering, marking a significant step in its expansion plans. The company aims to further grow its Bitcoin holdings, which currently stand at over 20,000 BTC worth approximately $2.1 billion.

The approval comes at a critical juncture for Metaplanet, which has relied heavily on selling shares to finance its Bitcoin purchases. After a 54% drop in share price since mid-June, raising funds has become more challenging. However, the company has managed to secure the necessary backing to expand its Bitcoin treasury.

The company's strategy involves issuing up to 555 million new shares, with the bulk of the proceeds earmarked for Bitcoin purchases. This move is part of Metaplanet's broader goal to accumulate 100,000 BTC by 2026 and 210,000 BTC by 2027, which would represent nearly 1% of all BTC in existence.

Metaplanet argues that this effort is not just about market mechanics but also about macro pressures. Japan's weak yen, prolonged negative interest rates, and high national debt have left the corporate sector searching for alternatives. For Metaplanet, Bitcoin has become that fallback, a reserve asset it believes offers stronger long-term value than traditional holdings.

Even with funding challenges, the company has continued to grow its Bitcoin stack. In its latest acquisition, Metaplanet added 1,009 BTC for about $112 million, pushing its total holdings to 20,000 BTC. This makes Metaplanet the largest corporate Bitcoin holder in Asia and places it among the top 6 globally.

The shareholder approval secures the capital needed to keep the company on track to meet its ambitious goals. With the funds now available, Metaplanet is better positioned to continue building its Bitcoin treasury.

Metaplanet's strategy of issuing new shares and using the proceeds for Bitcoin accumulation has fueled its growth without taking on debt. However, the repeated fundraising has also weighed on its stock. The company's immediate focus is to reach 30,000 BTC by the end of the year, but it has a long-term ambition to hold 100,000 BTC by 2026 and 210,000 BTC by 2027.

Once the accumulation is complete, Metaplanet plans to leverage its holdings as collateral for various business purposes. CEO Simon Gerovich has stated that the company's goal is to reach a point where it controls a significant portion of Bitcoin, making it difficult for others to catch up. He believes that Bitcoin, like securities or government bonds, can be deposited with banks to provide attractive financing against the asset.

Metaplanet's pivot to a Bitcoin-first model has been consistent, setting it apart from peers like Strategy, which uses debt to finance its Bitcoin purchases. The company's "555 Million Plan" aims to raise $555 million in equity, with the funds to be used for Bitcoin purchases.

The shareholder approval and the planned equity issuance signal a strategic move by Metaplanet to secure its position as Asia's leading Bitcoin treasury company. The company's long-term strategy is to accumulate as much Bitcoin as possible to reach a point where it has "escape velocity" and can leverage its holdings for various business purposes.

References:
[1] https://crypto.news/metaplanet-shareholders-approve-884m-bitcoin-treasury-expansion/
[2] https://www.tradingview.com/news/cryptonews:f3fa2f48b094b:0-metaplanet-oks-884m-raise-eyes-3-8b-preferred-while-its-bitcoin-flywheel-stalls/