The aggressive financial strategy of Japanese Bitcoin pioneer Metaplanet is facing its most severe challenge to date. As the company prepares for a decisive shareholder meeting in December, its substantial Bitcoin holdings have plunged into negative territory following the cryptocurrency’s recent downturn. With unrealized losses mounting and additional debt drawn down, the firm’s leveraged treasury model is under intense scrutiny.
Mounting Pressure on Bitcoin Reserves
Metaplanet, often called “Asia’s MicroStrategy,” now confronts a significant financial strain as Bitcoin’s value decline has pushed the company’s 30,823 BTC holdings deep into the red. The situation worsened when the Tokyo-based firm activated a $130 million credit facility on November 21, raising its total debt to $230 million.
The timing of this debt drawdown appears particularly unfavorable. Bitcoin currently trades around $87,700, substantially below Metaplanet’s average purchase price of $108,036 per coin. This valuation gap has created a staggering deficit: the company’s Bitcoin portfolio, valued at approximately 2.7 billion dollars at current prices, represents a paper loss of over 600 million dollars compared to its 3.3 billion dollar acquisition cost.
New Financing Initiatives Amid Market Turmoil
In parallel with increasing its debt exposure, Metaplanet has launched the “MERCURY” preferred share program, offering a fixed 4.9% dividend. These perpetual securities are designed to raise additional capital for further Bitcoin acquisitions without diluting existing common shareholders.
However, market participants remain skeptical about the company’s financial health. Metaplanet’s stock has retreated significantly from its June peaks, reflecting growing concerns about the viability of heavily leveraged cryptocurrency treasury strategies.
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Key financial metrics highlight the mounting challenges:
- Bitcoin treasury: 30,823 BTC
- Total debt: $230 million from a $500 million facility
- Collateral buffers: Management maintains these remain “conservative,” though the 20-30% Bitcoin correction has substantially reduced available margins
The Mercury preferred shares currently trade deep out of the money due to the depressed common stock price, diminishing their appeal as an equity financing instrument.
December: A Pivotal Month for Metaplanet
All eyes now turn to December, which promises to be a decisive period for the company’s future. An extraordinary general meeting scheduled for December 22 will see shareholders vote on proposals for an additional $135 million in financing and other capital measures aimed at strengthening the balance sheet.
Before this critical vote, the Bank of Japan’s policy decision on December 18 could significantly impact the yen’s value, consequently affecting the yen-denominated valuation of Metaplanet’s Bitcoin reserves.
Technical analysts note that the stock is testing crucial support levels. Market observers warn that if Bitcoin declines below $85,000, it could trigger substantial selling pressure. Only a recovery above the psychologically important $100,000 threshold would return Metaplanet’s treasury holdings to profitability.
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