Coin Post Report:
In recent years, the Japanese yen has experienced a sharp decline in exchange rates. Listed company Metaplanet has announced multiple large-scale purchases of Bitcoin since April, actions frequently likened to those of U.S. company MicroStrategy.
Transitioning to Bitcoin Investment
As of May 23, Metaplanet holds a total of 141.07 Bitcoins, valued at approximately $9.6 million. Simon Gelovich, CEO of Metaplanet, stated in a recent interview that while becoming Japan’s version of MicroStrategy is a challenging goal, they aim to provide Japanese investors with opportunities to engage in Bitcoin investment through similar strategic moves.
Following its transition to Bitcoin investment, Metaplanet quickly boosted market sentiment. Amid several rounds of positive news, the company’s stock price surged by up to 360% within two months after a prolonged period of stagnation. This trend mirrors the upward trajectory observed after MicroStrategy’s Bitcoin investments, drawing significant attention from users.
Previously known as Red Planet Hotels, Metaplanet was a popular economy hotel brand among young people, with operations in Thailand, Japan, the Philippines, Indonesia, and other locations. However, due to the pandemic, Red Planet Hotels faced drastic declines in revenue and workforce reductions.
Subsequently, the company diversified into Web3 and metaverse businesses, including projects like WEN Tokyo, Takumi-X, and an NFT trading platform. Adjusting to the ongoing decline in the yen against the dollar, Metaplanet continues to refine its corporate strategy.
According to Metaplanet’s official website, the company is currently undergoing a strategic transformation. The website states: “Metaplanet Corporation (Stock code 3350), listed on the Tokyo Stock Exchange, has begun implementing a strategic shift.”
Focusing its strategy on Bitcoin, Metaplanet positions Bitcoin (BTC) as its primary treasury reserve asset and plans to further accumulate Bitcoin using excess cash flow. This strategic shift is driven by Bitcoin’s unique attributes, such as its absolute scarcity and apolitical monetary policy.
Under the company’s business section, Metaplanet has introduced “Bitcoin Consultation” services: “Metaplanet Corporation provides specialized consulting services to assist enterprises in adopting Bitcoin.”
The company offers strategic guidance aimed at maximizing potential within existing corporate frameworks while overseeing entire corporate restructuring processes. From strategy formulation to integration promotion, Metaplanet helps companies establish Bitcoin as a cornerstone for future development. Moreover, Metaplanet actively develops strategic partnerships to promote the global mainstream adoption of Bitcoin through collaboration with industry leaders.
Japanese Version of MicroStrategy
On June 25, Metaplanet announced on Platform X that it had established a wholly-owned subsidiary in the British Virgin Islands to enhance strategic management of BTC assets.
Originally an IT enterprise focused on research, MicroStrategy, now the largest Bitcoin bull, successfully pivoted after announcing its Bitcoin purchases in August 2020, resulting in a rapid increase in its stock price. Despite mixed reviews during the process of borrowing and accumulating Bitcoin, its stock price has multiplied tenfold. As of June 20, MicroStrategy holds 226,331 Bitcoins valued at nearly $15 billion.
Simon Gelovich stated in a media interview, “While becoming Japan’s version of MicroStrategy is a challenging goal, we hope to provide Japanese investors with opportunities to engage in Bitcoin investments through similar strategies.
“We plan to continue purchasing Bitcoin regardless of short-term price fluctuations… We hope that in the future, Bitcoin will occupy a significant proportion of our balance sheet.” He added that the company “is committed to actively promoting the positive impact of Bitcoin domestically and internationally.”
When asked about considering other digital assets besides Bitcoin, Gelovich replied, “We only focus on Bitcoin because we believe it is the only truly decentralized digital asset. Despite criticisms of Bitcoin’s Proof of Work consensus mechanism by supporters of other cryptocurrencies or securities, it remains one of Bitcoin’s greatest strengths. By directly linking electricity input to the physical world, Bitcoin becomes a rare digital asset.”
Simon Gelovich noted that MicroStrategy’s stock trades at a 1.75x premium based on its Bitcoin holdings. “We believe that if Metaplanet maximizes its Bitcoin holdings per share, similar premiums can be enjoyed. Additionally, we plan to explore additional revenue opportunities within the Bitcoin ecosystem.”
Regarding hedging Bitcoin price fluctuations, Gelovich said they would consider various methods but primarily plan for long-term investment and holding of Bitcoin. “We maintain an unwavering stance on price fluctuations. We do not view volatility merely as ‘risk’ in the traditional sense but also as an opportunity.”
Frequent Bitcoin Purchases Lead to Two-Month Stock Surge
Since April, Metaplanet’s activities in purchasing Bitcoin have been frequent. On April 9, Metaplanet announced a collaboration with Sora Ventures and Morgan Creek Capital’s Mark Yusko, adding $6.56 million worth of Bitcoin (BTC) to its balance sheet. Two weeks later, the company purchased an additional 19.87 Bitcoins.
On May 13, Metaplanet further announced using Bitcoin as a strategic reserve asset to hedge against Japan’s increasing debt burden and the fluctuation of the yen.
On May 23, the company’s stock price rose by 158% in the previous week alone. Due to the significant increase in stock price, the Tokyo Stock Exchange suspended its stock trading for two consecutive days. On June 11, Metaplanet announced another increase by purchasing 23.35 additional Bitcoins, bringing its total holdings to 141.07 Bitcoins valued at approximately $9.6 million.
Two days ago (June 24), Metaplanet announced that its board had approved the use of ¥1 billion (approximately $7 million) to purchase Bitcoin, funded from the proceeds of its second series ordinary bonds (with collateral). According to the company’s announcement, these bonds carry an annual interest rate of 0.5% and are expected to be paid on June 26, 2024, with maturity on June 25, 2025.
Driven by positive news, Metaplanet’s stock price surged by 360% within two months since transitioning to Bitcoin investments after a long period of dormancy. As of June 25, the company’s stock price rose from ¥20 on April 1 to ¥92, reaching its peak at ¥112 on June 13. As of June 25, Metaplanet’s market value reached ¥16.15 billion (approximately $101 million).
Metaplanet’s stock trend closely resembles that of MicroStrategy following its Bitcoin investments. MicroStrategy Chairman and Co-Founder Michael Saylor began purchasing Bitcoin in 2020, leading to significant growth in the company’s stock price.
Filling the Void
Currently, Metaplanet’s vision and ambition extend beyond Bitcoin investment to exploring opportunities within the Bitcoin ecosystem. When asked about the possibility of Japan launching a Bitcoin ETF, Gelovich stated, “Currently, Japan does not have a Bitcoin ETF, meaning Japanese investors cannot easily invest in Bitcoin through securities accounts. Therefore, Metaplanet aims to fill this gap.”
He added, “Unlike ETFs, as an operating company, Metaplanet can enter capital markets and raise funds on terms favorable to shareholders. As the first Japanese listed company strongly supporting Bitcoin, we have the capability to promote Bitcoin as a globally accepted monetary asset through business expansion and information dissemination.”
Overall, Metaplanet’s strategic adjustments can be seen as a bold and innovative attempt, yet may also face challenges in the future. As time progresses, the market will witness how Metaplanet continues to create value in its Bitcoin journey—its exploration has only just begun.
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