Metaplanet Becomes Bitcoin Treasury Company, Registers First Profit since 2017

by

As an analyst with over two decades of experience in the financial industry, I find myself intrigued by Metaplanet’s bold move towards Bitcoin accumulation and treasury management. Having witnessed the rise and fall of countless tech stocks and cryptocurrencies, it is refreshing to see a traditional Japanese firm embracing digital assets as a strategic financial tool.

Metaplanet, often known as Japan’s equivalent to MicroStrategy, has unveiled a fresh venture in Bitcoin Treasury operations. The aim is to significantly increase their holdings of Bitcoin as part of their financial planning strategy.

The statement reveals that Metaplanet’s Board of Directors has made Bitcoin treasury management a primary strategic priority. In line with their new strategy, “Bitcoin First, Bitcoin Only,” they aim to use long-term debt and occasional stock offerings to continually acquire Bitcoins.

On Metaplanet, Bitcoin Performance Ratio (BTC Yield) serves as the main evaluation standard. This metric calculates the proportion of change in the company’s total Bitcoin holdings relative to the total number of outstanding shares after considering all dilutions. To achieve optimal BTC Yield, Metaplanet aims to employ various funding methods like loans, stock offerings, and convertible bonds for buying and amassing Bitcoins.

Since May 2024, the company has been amassing Bitcoins and now holds over 1,000 of them within just under half a year. Yesterday, Metaplanet disclosed that they have approximately 4.5 billion Yen worth of bonds, which they intend to use to speed up their Bitcoin purchasing strategy even more.

Furthermore, the company has ventured into trading options for Bitcoins as well, which helps them gain additional income during Bitcoin’s price fluctuations and boost their overall Bitcoin assets. By combining Bitcoin-related transactions with its main operations, Metaplanet seeks to foster long-term growth and solidify its status as a key player in Japan’s rapidly advancing digital currency marketplace.

Metaplanet Turns Profitable Again since 2017 with Stock Hitting All-Time High

Simon Gerovich, CEO of Metaplanet, shared that the company is progressing towards their first operational profit since 2017, primarily fueled by strong results in their hotel sector and Bitcoin-related ventures. This significant achievement could indicate a possible change in direction for this Japanese firm’s financial future.

Notably, the profit forecast does not account for unrealized gains from Bitcoin holdings, which currently stand at an estimated ¥7.4 billion. Gerovich emphasized that achieving profitability would allow the company to channel newly raised funds directly into Bitcoin acquisitions. He wrote:

It’s crucial to note that the projected operating profits we’ve shared do not include potential value from our Bitcoin investments, which are currently estimated at around ¥7.4 billion. By reaching profitability, any fresh capital we acquire can be used for purchasing more Bitcoins instead of covering operational costs.

After implementing its Bitcoin acquisition strategy in May, Metaplanet’s shares experienced a significant upward trend. On Tuesday alone, the share price reached an all-time high of 4,240 JPY and traded at unprecedented volumes of $180 million. This recent spike in the stock price has also propelled the company to achieve a market value of $1 billion. Furthermore, the year-to-date gains for Metaplanet’s shares have skyrocketed by an impressive 2,100%.

Read More

2024-12-18 14:24