Metaplanet Expands Bitcoin Strategy with Additional $130M Loan

Metaplanet Expands Bitcoin Strategy

Tokyo-based Bitcoin treasury firm Metaplanet has secured an additional $130 million in Bitcoin-backed credit, enhancing its strategy of using collateralized borrowing to boost its Bitcoin acquisitions, revenue-generation tactics, and potential share repurchases.

Key Takeaways

Metaplanet has obtained a $130 million loan as part of a $500 million credit facility.
The company has now borrowed a total of $230 million from this credit line.
Metaplanet’s funding strategy encompasses both debt and equity options.
Despite a nearly 20% unrealized loss on its Bitcoin investments, Metaplanet remains committed to accumulating BTC.

Metaplanet Bolsters Its Bitcoin Strategy with New Funding

Tokyo-listed Bitcoin treasury company Metaplanet has secured an additional $130 million in Bitcoin-backed credit, furthering its approach to using collateralized borrowing for accelerated BTC purchases, enhanced income strategies, and potential stock buybacks.

On Tuesday, Metaplanet announced that it finalized the loan last Friday as part of a previously established credit facility. This borrowing is part of the company’s larger $500 million credit line, which allows for short-term liquidity through its Bitcoin holdings.

With this new funding, Metaplanet's total borrowing has risen to $230 million from the $100 million previously disclosed on October 31.

The company acknowledged that leveraging its Bitcoin could lead to collateral calls if Bitcoin's price drops. However, Metaplanet is confident due to the substantial size of its reserves, believing they are sufficient to handle market fluctuations. “Given the significant scale of Bitcoin holdings relative to the loan amount, the Company expects to maintain adequate collateral headroom,” Metaplanet stated.

Metaplanet Loan Disclosure
Metaplanet disclosure of $130 million loan. Source: Metaplanet

Dual Financing Strategies for Bitcoin Accumulation

The recent loan highlights Metaplanet’s two-pronged financing strategy that revolves around both debt and equity instruments to enhance its Bitcoin accumulation efforts.

On one side, the company’s $500 million Bitcoin-backed credit facility provides flexible, on-demand liquidity secured by its BTC reserves. This structure allows Metaplanet to expand its Bitcoin income programs, purchase further Bitcoin, and support stock repurchases without the need to issue more shares.

In conjunction with the credit line, Metaplanet plans to raise $135 million by issuing new Class B perpetual preferred shares. Unlike the short-term and easily repayable nature of the credit facility, these preferred shares are designed for long-term funding. Investors purchasing these shares will receive a fixed annual payment and may have the option to convert them into standard stock. In specific circumstances, the company can also repurchase these shares.

This dual approach demonstrates Metaplanet's strategy of utilizing both collateralized borrowing and specialized equity issuance to scale its Bitcoin treasury, even as its holdings may currently be experiencing unrealized losses.

Related: Tokyo Exchange Operator Eyes Action on Bitcoin-Holding Firms After DAT Rout

Continuing to Hold Despite Market Challenges

According to data from BitcoinTreasuries.NET, Metaplanet currently faces an almost 20% unrealized loss on its Bitcoin investments. The company acquired its BTC at an average price of $108,036, while Bitcoin's current value is around $87,000.

Nevertheless, Metaplanet remains committed to holding and accumulating Bitcoin. Bitcoin Strategy Director Dylan LeClair expressed on X that the company is “HODLing.”

Dylan LeClair's Statement
Source: Dylan LeClair

Community member Ragnar also noted the timing of the loan coincided with Bitcoin falling to $82,000 on Friday, suggesting that it's likely Metaplanet took advantage of the dip in prices. “It’s very likely that they bought the Bitcoin dip. I like the stock,” Ragnar commented.

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