Metaplanet Plans $135 Million Raise To Buy More Battered Bitcoin

Metaplanet plans to raise $135 million to expand its Bitcoin holdings, doubling down on the asset even after it plunged 33% from an all-time high on Oct. 6.

The Japan-based Bitcoin treasury firm said in a Nov. 20 announcement that it plans to issue 23.6 million Class B shares priced at 900 yen ($5.71) each, bringing the total raise to 21.249 billion yen. 

The offering will be executed through a third-party allotment to overseas investors depending on whether the plan receives approval from a shareholder meeting on Dec. 22.

The announcement came as Bitcoin headed for its worst monthly performance since June 2022, following the collapse of Do Kwon’s TerraUSD stablecoin. BTC has plummeted more than 10% in the past 24 hours to trade at $81,956.25 as of 6:07 a.m. EST, CoinMarketCap shows. 

Metaplanet Offering Comes With 4.9% Dividend

The new offering, which the company is calling “MERCURY,” will offer holders a 4.9% fixed annual dividend and give them the right to convert their preferred shares into common stock at a conversion price of $6.34.

The company will retain a market-price call option that can be exercised if Metaplanet’s stock trades more than 130% above the liquidation preference for 20 consecutive trading days. The shares will also come with no voting power, but will carry redemption rights under specific events. 

Metaplanet Stock Slides

Metaplanet shares have plunged more than 61% in the past six months and tumbled 7% during the past 24 hours. 

Its mNAV (multiple Net Asset Value), which is its market cap divided by the value of the Bitcoin it holds, has dropped below 1 to stand at 0.98 as of 5:37 a.m. EST. 

Metaplanet share price (Source: Google Finance)

Metaplanet is the fourth-largest corporate Bitcoin holder globally with 30,823 BTC on its balance sheet. At current prices, the dollar value of these holdings equates to $2.55 billion, according to data from Bitcoin Treasuries. 

The firm purchased its Bitcoin holdings at an average price of $108,036, resulting in an unrealized loss for the company of more than 23%. 

MSCI Could Soon Axe Metaplanet

Metaplanet may soon face additional problems after news that MSCI is consulting with the investment community on whether to exclude from its indexes firms with more than 50% of crypto assets. 

A preliminary list released by MSCI shows 38 crypto companies may be excluded. 

Preliminary list of companies that might be excluded (MSCI)

MSCI said that some digital asset treasury companies may be more similar to investment funds that are not eligible for inclusion in its indexes.

The Odds that MSCI excludes such firms are ”solidly in favor of it,” Charlie Sherry, head of finance at BTC Markets, told CoinTelegraph. It ”only puts changes like this into consultation when they’re already leaning that way,”

JPMorgan estimates that if the MSCI excluded Michael Saylor’s Strategy, and other index providers did the same, it could face a $12 billion hit as passive investors that track the indexes rebalance their portfolios.