Metaplanet Stock Tanks After It Converts Bitcoin Treasury to New Business Line
December 18, 2024
Shareholders did not respond well after Japanese investment firm Metaplanet announced the addition of its Bitcoin Treasury Operations as a new core business line.
Building on months of preparation and shareholder approvals, the company is doubling down on Bitcoin (BTC) as both a financial asset and revenue driver as the world’s largest crypto soars to new peaks. Just yesterday, Bitcoin set a new all-time high above $108,000.
Despite the ambitious announcement, Metaplanet’s stock, which trades under the 3350 ticker on the Tokyo Stock Exchange, fell by 13.73% on Tuesday and closed at $22.90 (3,520 JPY), according to Google Finance data.
The dip reflects mixed investor sentiment about the company’s Bitcoin-heavy strategy and market concerns over Bitcoin’s volatility.
With its pivot, Metaplanet said it intends to increase its Bitcoin holdings while hedging against the weakening Japanese yen and leveraging long-term debt and equity issuances.
“Moving forward, Metaplanet is committed to its role as Japan’s leading Bitcoin Treasury Company, recognizing its responsibility as a pioneer in the country’s Bitcoin ecosystem,” the company said in a statement on Tuesday.
As part of the move, Metaplanet will focus on purchasing, holding, and managing Bitcoin through financial instruments such as loans, equity issuances, and convertible bonds.
To measure the efficiency of these acquisitions, the firm adopted BTC Yield in October. It’s a performance metric that assesses the growth in Bitcoin holdings relative to shareholder dilution.
In addition to accumulation, Metaplanet generates revenue by selling Bitcoin put options, leveraging the asset’s volatility to strengthen its financial position.
The Tokyo-based firm will also utilize its exclusive license for Bitcoin Magazine Japan to create new revenue streams through marketing and educational initiatives, integrating Bitcoin into its business operations.
The company has raised over $140 million since October through equity issuances, bond offerings, and stock rights exercises. Most recently, it issued zero-interest bonds worth $30 million (¥4.5 billion) to support further Bitcoin acquisitions.
On Tuesday, Metaplanet revealed its forecast for the fiscal year ending December 31, projecting $5.8 million (¥890 million) in revenue, compared to $1.7 million (¥261 million) the previous year, marking a 240% increase.
Operating profit is expected to hit $1.8 million (¥270 million), a turnaround from the $3 million (¥468 million) loss reported in 2023.
“Combined with the strong performance of the hotel business […] the company is on track to record consolidated operating profit for the first time since FY2017,” the firm stated.
As of December, Metaplanet holds 1,142. 287 BTC, valued at $119 million, making it one of the largest corporate Bitcoin holders in Japan.
