Metaplanet plans to raise $329 million to refinance Bitcoin-backed loans and fund share buybacks after its stock has declined 90% from its peak.
On Oct. 13, the Japanese Bitcoin treasury company announced plans to issue ¥52 billion ($329 million) in unsecured, zero-coupon Euro-yen convertible bonds due in 2031.
Expected to close on Oct. 29, the offering will target investors primarily in Europe and Asia, with the bonds slated for listing on the Singapore Exchange.
The financing would let Metaplanet replace part of its interest-bearing, Bitcoin-collateralized debt with borrowing that requires no regular interest payments. The company expects the restructuring to free up pledged Bitcoin, reduce financing costs and improve financial flexibility without selling its cryptocurrency holdings.
Bitcoin-backed debt pressures Metaplanet's capital strategy
Metaplanet's refinancing comes as its reliance on Bitcoin-backed borrowing has exceeded the company's internal risk limits.
As of Sept. 30, the company had approximately $649.5 million outstanding under an $800 million credit facility secured by its Bitcoin holdings.
That represented 17.7% of the net asset value of its Bitcoin reserves, well above management's guideline to keep the ratio below 10%.
Metaplanet, which held 44,000 BTC at the end of September, acknowledged that further declines in Bitcoin prices could increase the borrowing ratio by reducing the value of its cryptocurrency holdings.
To address this exposure, the company plans to allocate about ¥23.6 billion ($149 million) of the new bond proceeds to repay part of its outstanding loans in November.
The repayment would reduce borrowing under the facility to approximately $500.5 million. Based on September's reported asset values, that would lower the borrowing ratio to roughly 13.6%, assuming Bitcoin's value and other conditions remained unchanged.
However, that would still leave Metaplanet above its preferred leverage threshold, suggesting that the company remains exposed to further declines in Bitcoin prices.
Metaplanet acknowledged that replacing its existing Bitcoin-backed loans with convertible bonds would not immediately reduce its total liabilities, even as it lowers interest expenses and reliance on pledged collateral.
Although the new bonds mature in 2031, investors can demand repayment after three years, potentially forcing the company to refinance earlier than the stated maturity.
Metaplanet targets share buybacks as stock struggles
Beyond restructuring its debt, Metaplanet also plans to allocate up to ¥28.3 billion ($179 million) of the proceeds to share repurchases as part of a newly authorized ¥60 billion ($380 million) buyback program.
The company simultaneously terminated its previous ¥75 billion ($475 million) repurchase authorization, established in October 2025, under which it had not acquired any shares.
The new program allows Metaplanet to repurchase up to 200 million common shares, representing approximately 14.7% of its outstanding stock, between Oct. 14, 2026, and Oct. 13, 2027.
It plans to begin the program on Oct. 14 through the Tokyo Stock Exchange's ToSTNeT-3 off-auction trading system, targeting up to 96.9 million shares for approximately ¥25.3 billion ($160 million).
If fully executed, the planned transaction could reduce the company's outstanding share count by about 7.1%, though the final volume will depend on the number of shares offered for sale.
The renewed buyback effort comes amid a prolonged decline in Metaplanet's stock, as Bitcoin's struggles have weighed on investor sentiment toward cryptocurrency treasury companies.
Metaplanet shares have declined approximately 36% this year, closing at ¥261 on Oct. 13. The stock has also lost nearly 90% of its value from its June 2025 peak of ¥1,930.
By comparison, Strategy, the world's largest publicly traded corporate Bitcoin holder, has gained about 1% this year despite cryptocurrency market volatility.
The contrasting performances highlight the challenges Metaplanet faces in maintaining investor demand for its shares while pursuing a Bitcoin accumulation strategy.
Its declining valuation has also complicated its ability to raise capital through common equity without diluting existing shareholders.
Under its revised capital allocation policy, Metaplanet generally avoids issuing common shares when its market-to-net-asset-value ratio (mNAV) falls below 1.
The measure compares the company's enterprise value with the net asset value of its Bitcoin holdings. Issuing shares below that threshold could reduce existing shareholders' per-share exposure to Bitcoin.
Repurchases could improve that metric by reducing outstanding shares, although the benefits will depend on execution prices and any subsequent equity issuance.
However, the buyback program comes with a potential counterweight. Metaplanet CEO Simon Gerovich has agreed to lend up to 55 million personally held shares through his wholly owned Gerovich Family Holdings Limited to support hedging activities associated with the convertible bonds.
The arrangement, which carries an annual lending fee of 0.75%, would allow investors to borrow and potentially sell Metaplanet shares to hedge their exposure.
Such transactions could create selling pressure even as the company repurchases its own stock, although the number of shares ultimately borrowed or sold remains uncertain.
The bonds could also dilute existing shareholders if investors convert them into equity. Metaplanet intends to set the conversion price above the share price corresponding to an mNAV of 1 at issuation, but it has not yet determined the final conversion terms.
