TLDR
- Japanese firm Metaplanet plans to raise about $70 million through stock rights issuance.
- The company intends to use $58.76 million of the raised funds to invest in Bitcoin.
- Metaplanet currently holds around 246 Bitcoins worth approximately $13.4 million.
- The company is following a strategy similar to MicroStrategy, which has accumulated over 220,000 Bitcoins.
- Metaplanet views Bitcoin as a long-term investment and a hedge against currency depreciation.
Metaplanet Inc, a Japanese investment and consulting firm, has announced plans to raise approximately 10 billion Japanese yen (about $70 million) through a stock rights offering.
The company intends to use 8.5 billion yen ($58.76 million) of the raised funds to invest in Bitcoin, significantly expanding its cryptocurrency holdings.
The decision was made during a recent board of directors meeting, where Metaplanet approved a gratis allotment of its 11th series of stock acquisition rights to all common shareholders.
Under this plan, shareholders of record as of September 5 will receive one stock acquisition right per common share. These rights will allow shareholders to acquire Metaplanet common stock at an exercise price of 555 yen (about $4) during the period from September 6 to October 15.
Currently, Metaplanet holds about 246 Bitcoins, valued at approximately $13.4 million. The planned investment would substantially increase the company’s Bitcoin treasury. Metaplanet’s CEO, Simon Gerovich, explained that the firm sees Bitcoin as “the apex monetary asset” and believes it will make a great addition to the company’s treasury.
This move mirrors the strategy employed by MicroStrategy, a Nasdaq-listed business intelligence firm that has been accumulating Bitcoin since 2020. MicroStrategy has raised debt and sold shares to acquire over 220,000 Bitcoins, now worth billions of dollars.
Metaplanet’s decision to invest heavily in Bitcoin is based on two main factors. First, the company sees long-term appreciation potential in the asset. Second, Bitcoin is viewed as a hedge against currency depreciation, particularly important given the recent volatility in the Japanese stock market and the depreciation of the yen against the US dollar.
The Japanese stock market recently experienced its worst one-day drop since 1987 when the Bank of Japan raised rates on short-term government bonds from 0% to 0.25% on July 31. This event led to a significant sell-off in the cryptocurrency market, with Bitcoin and Ethereum seeing price drops of around 18% and 26%, respectively.
Despite these recent market fluctuations, Metaplanet remains confident in Bitcoin’s long-term potential. The company stated, “An increase in Bitcoin prices is expected to strengthen our balance sheet, enhance asset value, and positively contribute to our earnings.”
Metaplanet is also considering future business ventures within the Bitcoin ecosystem. The company suggested it could generate additional income from its Bitcoin holdings by selling covered calls on the digital assets. Additionally, Metaplanet is exploring the possibility of transforming its hotel business to cater to Bitcoin enthusiasts and businesses, offering unique services and new revenue sources.
This pivot towards Bitcoin comes as Metaplanet has strategically exited most of its hotel business, which had been suffering from declining revenue and recurring losses over five consecutive periods.
