According to Woofun AI, Metaplanet, the publicly listed company holding the second-largest Bitcoin reserves, has announced the issuance of 52 billion yen in zero-interest convertible bonds, aiming to ease liquidity pressure through debt restructuring.
This move marks a major shift in its financing strategy, with proceeds mainly directed toward repaying existing debt and stock buybacks rather than adding new Bitcoin holdings, in response to increasingly severe financial difficulties.
The Financial Structure Approaches a Dangerous Edge
Metaplanet's current financial structure has edged dangerously close to the brink. As of the end of September, the company held 44,000 Bitcoin, but its Bitcoin-collateralized credit borrowings totaled approximately $649.5 million, representing 17.7% of its Bitcoin net asset value—far exceeding the 10% cap set by management.
Should Bitcoin prices continue to decline, collateral shrinkage would push the borrowing ratio even higher, triggering liquidation risk.
To address this, Metaplanet plans to replace interest-bearing collateralized loans with newly issued zero-interest convertible bonds, thereby diluting immediate liquidation pressure. The bonds mature in 2031, but investors gain the right to demand repayment after three years.
Of the 52 billion yen issuance, approximately 23.6 billion yen will be used to repay Bitcoin-collateralized loans, up to 28.3 billion yen for stock buybacks, and none will be invested in new Bitcoin purchases.
This operation stands in stark contrast to its previous model of continuously increasing BTC positions through collateralized borrowing.
Stock Price Plunge and Controversial Trades
More alarming is that Metaplanet's stock price has fallen nearly 90%, plummeting from a peak of nearly 2,000 yen in June last year to the current 260 yen.
Previously, the company conducted a highly controversial maneuver: first selling 10,000 BTC at an average price of 12.47 million yen, then buying back 11,000 BTC at 13.63 million yen. This sell-low-buy-high move was interpreted as an attempt to prove to rating agencies that its Bitcoin reserves have realizable value.
Woofun AI's compiled data shows that against the backdrop of lacking a credit rating, zero-interest convertible bonds can only provide a brief breathing window, not a fundamental solution.
Strategy's Comparative Resilience
In comparison, industry leader Strategy (MSTR.US), though also facing challenges, demonstrates significantly stronger risk resistance.
Strategy (MSTR.US) currently holds 848,200 BTC, with a cumulative cost of approximately $64 billion and an average cost of $75,444. Last week, Strategy (MSTR.US) spent $21.5 million to purchase 250 BTC, but repurchased STRC preferred shares during the same period at a cost of $192.4 million—nearly nine times its Bitcoin expenditure.
Strategy (MSTR.US)'s approach is to avoid issuing common stock when mNAV falls below 1. When the market no longer grants a premium, the flywheel effect of issuing stock to buy Bitcoin essentially stalls.
With Bitcoin's recent rally, Strategy (MSTR.US) appears to have escaped its most dangerous moment, holding nearly $5 billion in dedicated reserves, while STRC's 12% annual dividend yield still supports nearly $200 million in weekly buybacks.
Shared Core Problems
However, Metaplanet and Strategy (MSTR.US) face similar core issues: once mNAV drops below 1, equity financing channels freeze, while fixed costs from preferred shares and debt continue to accumulate.
Metaplanet is attempting to transform into a financial intermediary through its continuous bond issuance program (BitBonds) and net interest income strategy, using low-cost yen financing to invest in preferred securities issued by Bitcoin treasury companies to earn spreads.
But all of this depends on obtaining rating agency recognition. Before a rating is secured, Metaplanet is still trading time for space.
Industry Warning
Metaplanet's predicament reflects the general vulnerability of Bitcoin treasury companies during market downturns. Although Strategy (MSTR.US) has temporarily stabilized its position through scale advantages, it would be equally difficult for it to remain unscathed if Bitcoin fails to sustain growth.
Metaplanet lacks a credit rating and sufficient reserves, and its vision of transforming into a financial intermediary remains full of uncertainty. For the entire industry, this serves as a warning about the potential risks of relying on leverage and equity financing models. As market volatility intensifies, investors need to be alert to the possibility of liquidity crises similar to Metaplanet's erupting again.
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