Metaplanet Shifts to Acquisition Strategy
Japanese Bitcoin treasury firm Metaplanet is transitioning to the second phase of its ambitious Bitcoin strategy. This comes after months of actively accumulating Bitcoin (BTC), whereby the company will now leverage its growing BTC stash as collateral to finance acquisitions. This represents a significant shift from its previous strategy of merely stockpiling digital assets.
The Two-Stage Bitcoin Strategy
Metaplanet CEO Simon Gerovich has recently informed the Financial Times that the company’s strategy is a two-pronged approach. Step one was to acquire as much Bitcoin as possible to reach a “critical mass.” Step two, according to Gerovich, is to use Bitcoin as collateral to finance takeovers of profitable businesses.
Gerovich stated, “We need to accumulate as much bitcoin as possible to get to the stage where we’ve reached escape velocity and it becomes very difficult for people to catch up.” The company will place Bitcoin on deposit with banks, similar to securities or government bonds, to negotiate low-cost financing terms for acquisitions.
Plans to Purchase Cash-Flowing Businesses
The funds raised through using Bitcoin as collateral will be used to buy companies that have stable cash flows. Gerovich mentioned the possibility of the company entering digital banking or financial services, which aligns with the company’s strategic focus.
This approach is the same as that of Michael Saylor’s Strategy, the largest corporate holder of Bitcoin. Gerovich, however, clarified that Metaplanet will not utilize convertible debt to fund its acquisitions, a strategy employed by Saylor’s firm. Instead, Metaplanet prefers to avoid the need to repay funds in the near term.
Recent BTC Purchase Marks Key Milestone
Metaplanet’s Bitcoin move was turbo-charged by its latest purchase: 2,205 BTC for 34.49 billion yen ($238 million). The purchase brings its total Bitcoin holdings to 15,555 BTC, and it doesn’t plan on stopping. The company has been using stock warrants and bond activity to fund the purchases, which is essentially allowing it to directly convert capital into Bitcoin.
Once a hotel management business, Metaplanet changed course to its BTC-focused strategy in 2024. Worth $1.6 billion in Bitcoin purchases to date, the firm aims to hold 1% of the total Bitcoin supply, or approximately 210,000 BTC, by 2027.
