Japan’s leading Bitcoin treasury firm, Metaplanet, has just acquired 1,009 BTC, bringing its total holdings to 20,000 BTC as the firm issues millions of new shares.
In a Monday announcement, the company stated it acquired 1,009 BTC for 16.479 billion yen (nearly $112 million), reaching a total of 20,000 BTC. On the same day, it announced the issuance of 11.5 million new shares last week, following an investor’s exercise of warrants to acquire stock.
As per BitcoinTreasuries.net data, Metaplanet stands as the sixth-largest and the top Bitcoin treasury firm in Japan. The company purchased its Bitcoin at an average price of $102,607, resulting in a profit of 6.75% compared to Bitcoin’s current price.
The investor involved, Evo Fund, has purchased 10 million shares at $5.67 and 1.5 million at just under $6, totaling approximately $65.73 million. Metaplanet plans to use these funds to finance the early redemption of around $20.4 million in previous bond issues. Evo Fund retains rights to acquire an additional 34.5 million shares.
Related: Dutch crypto firm Amdax targets 1% Bitcoin supply with $23M treasury launch
Metaplanet responds to market conditions
This announcement also comes amid increasing pressure on Metaplanet, as its share price has dropped significantly, jeopardizing the fundraising model it has adopted to expand its Bitcoin treasury. The firm’s stock has fallen by 54% since mid-June, even as Bitcoin’s price has risen by about 2% during the same timeframe.
Analysts noted that declining stock prices make exercising warrants for Evo Fund less appealing, which in turn strains Metaplanet’s liquidity and curtails its ability to acquire additional Bitcoin. Nevertheless, the firm’s strategy seems to be adapting to these evolving circumstances.
Recently, Metaplanet announced plans to boost its capital by raising approximately 130.3 billion yen ($880 million) through a public share offering in international markets. Today, shareholders will vote on a proposal to issue up to 555 million preferred shares, potentially raising up to 555 billion yen ($3.7 billion).
Related: Bitcoin treasury firm Metaplanet graduates to FTSE Japan and All-World indexes
Bitcoin treasuries as secure investments
Following the success of the corporate Bitcoin treasury strategy introduced by Strategy (formerly MicroStrategy), many firms have chosen to emulate this approach. However, its long-term effectiveness is not guaranteed.
In fact, several Bitcoin treasuries appear to be facing significant challenges. These treasuries risk collapse when Bitcoin prices drop, potentially leading to a loss of net asset value premiums and restricting funding avenues. Loans or margin calls might then force these companies to sell their Bitcoin holdings.
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