Once a little-known hotel company, Metaplanet Inc. made the decision to accumulate Bitcoin (BTC), which earned it worldwide fame.
According to analyst Shanaka Anslem Perera, the company is currently losing approximately $651 million on its 30,823 BTC investment. At the same time, the organization is posting record profits and preparing a complex preferred share deal.
Perera painted a complex financial picture for Metaplanet. The company acquired Bitcoin at an average price of $108,036 per BTC, but with the cryptocurrency trading at around $87,500 in the first half of November 26, the unrealized loss reached $651 million. This contributed to the company’s share price declining 81% since June.
However, the company’s financial statements tell a different story: revenue rose 1700% year-on-year to 4,3 billion yen, while net profit for the fiscal year ending in September reached 13,5 billion yen.
According to Perera, Metaplanet’s strategy is based on reflexivity. When the price of Bitcoin rises and the company’s shares trade at a premium, it can issue shares to acquire more BTC.
However, when the shares began trading below the value of the company’s Bitcoin, this resulted in the mNAV multiple falling to 0,88 at the end of November, making the share issue devastating for existing shareholders.
To continue raising capital, on November 20, the company launched a perpetual preferred instrument called «MERCURY,» with a 4,9% dividend and a conversion price of 1000 yen. A shareholder vote on December 22 will determine whether approximately 21,25 billion yen of this capital will be liquidated.
Meanwhile, on the evening of November 26, the price of Bitcoin moved higher and exceeded the resistance at $90,000, pulling almost the entire altcoin market up with it.