Metaplanet spends $73 million proving to creditors it will sell its bitcoin

Replacing the 10,000 coins cost $7,321 more per coin than they sold for, about $73.2 million in all ^[13]. In cash terms, Metaplanet paid out $948.7 million and took in $789.2 million ^[1][2]. The net $159.5 million bought 1,000 extra bitcoin. That works out to about $159,500 a coin, close to twice the market price on the buyback ^[16]. At its third-quarter pace of $5.4 million, the options-based income business would need about 13.6 quarters to earn the $73.2 million back ^[20][8].

The $73.2 million is a market outcome, or more precisely, the price rise Metaplanet sat out while it held cash ^[13]. Had bitcoin fallen between the trades, the same exercise would have returned more coins than it gave up. The proceeds sat in cash and no debt was repaid. The repurchase came later, in a separate transaction ^[5].

Coverage was never in doubt. The sale beat the principal on Metaplanet's bonds, borrowings and other interest-bearing liabilities, net of cash, cash equivalents and dollar stablecoins ^[4]. Net debt was therefore below $789.2 million, under 21% of the $3.8 billion the holdings were worth at the end of September ^[17]. The holdings are also below cost: 44,000 coins carried at about $4.33 billion are worth roughly $530 million less ^[18]. The company's case is about intent. It argued that bitcoin's market liquidity may not be enough for creditors if an issuer is reluctant to sell, and that a completed sale shows both the ability and the willingness to raise cash ^[6][10].

A rating agency can read the quarter two ways. It can credit a sale large enough to clear net debt, something an issuer pointing only to market depth cannot show ^[4][6]. Or it can note that the coins came back within the quarter, plus 1,000 more, and that Metaplanet restated its plan to grow total holdings and bitcoin per share, selling only when management judges it appropriate ^[3][12]. I think the second reading fits the quarter better. The sale proved Metaplanet can sell, and its stated policy still points toward buying. The counter-case is that willingness only has to be shown once at full size, and Metaplanet has now shown it. A rating that cites the sale, followed by bond or preferred-share funding at a lower cost than the company pays now, would prove me wrong ^[11].

Its plans for cash point the same way. Under a new Net Interest Income Strategy, Metaplanet would put 10% to 15% of total assets into preferred securities issued by bitcoin treasury companies. It is seeking returns above its funding costs, to service its obligations and buy more bitcoin ^[7]. Measured against the bitcoin holdings alone, that is $380 million to $570 million ^[19]. The quarter's buyback already cost $159.5 million more than the sale raised ^[16].

Chief executive Simon Gerovich said the announcements reflected ambitions beyond accumulating bitcoin. "Our objective has been to build the leading Bitcoin financial company in Asia," he said ^[9]. The shares closed 2% higher on Monday at 297 yen ^[15].