In a significant move signaling confidence in its digital assets, Tokyo-listed Bitcoin treasury company Metaplanet Inc. has announced a robust ¥75 billion ($500 million) share buyback program following a recent dip in its stock price. The initiative emerges as the company’s market-based net asset value (mNAV) dropped to 0.88, indicating that the stock had fallen below its actual Bitcoin holdings.
Under this buyback scheme, Metaplanet will repurchase up to 150 million shares, equivalent to 13.13% of its total issued shares. The program is set to run from October 28, 2025, through October 28, 2026, giving the company ample time to navigate the market dynamics and bolster shareholder value amidst ongoing volatility in the crypto space.
The financing for the buyback will primarily come from a newly secured Bitcoin-backed credit line, featuring a borrowing limit of $500 million. This facility not only supports the share buyback but can also be leveraged for further Bitcoin acquisitions or bridge the financing for a potential preferred share issuance.
Market Value vs. Bitcoin Holdings
The recent decline in mNAV raised eyebrows, particularly as it reflects the disparity between Metaplanet’s market value and its Bitcoin holdings—currently amounting to 30,823 BTC, valued at approximately $3.5 billion. Indeed, a reading below 1.0 in mNAV suggests stocks are underperforming compared to the firm’s Bitcoin reserves, which led Metaplanet to halt any new Bitcoin purchases during this downturn.
The company, however, remains optimistic about its long-term strategy, aiming to accumulate a total of 210,000 BTC by 2027 while asserting that the prevailing stock prices do not accurately reflect the real economic value embedded in its assets.
Broader Industry Implications
Metaplanet is not alone in navigating these turbulent waters. Other major players in the cryptocurrency sector, such as ETHZilla, have also initiated buyback schemes to counteract undervalued stock prices. Recently, ETHZilla launched a $40 million buyback amidst similar NAV challenges.
A report from 10x Research highlights mounting pressures faced by Bitcoin treasury firms, indicating that several have witnessed significant NAV collapses, leading to financial strain on retail investors while treasury firms continue to hoard Bitcoin.
Additionally, the recent credit rating assigned to Strategy, Michael Saylor’s Bitcoin treasury company, underscores the growing concerns about Bitcoin concentration risks and liquidity issues. Rated ‘B-‘ by S&P Global Ratings, the rating indicates speculative status, reflecting the cautious sentiment surrounding cryptocurrency-based investments.
Following the announcement of its buyback program, Metaplanet shares experienced a slight uptick of 2%, closing around 499 yen. The objective of the buyback is not only to enhance Bitcoin yield per share but also to restore investor confidence in the company amidst a backdrop of market volatility.
As Metaplanet and other Bitcoin-focused firms pursue these repurchase strategies, the intricate relationship between market perception and actual asset value continues to play a pivotal role in shaping the landscape of the cryptocurrency investment arena.
