Metaplanet to invest $58M in Bitcoin amid Japanese market rebound, calls it the 'apex monetary asset'

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Metaplanet, a Japanese investment and consulting firm which has been touted as Asia’s version of MicroStrategy, has announced plans to invest approximately 8.5 billion yen ($58.76 million) in Bitcoin through a stock acquisition rights offering to shareholders. The move comes as part of a larger fundraising effort totaling around 10 billion yen ($69.13 million).

The company’s Board of Directors approved the gratis allotment of its 11th series of stock acquisition rights to all common shareholders. The rights will be distributed to shareholders of record as of September 5, with the allotment taking effect from September 6 onwards. Shareholders will receive one stock acquisition right for each share held, with an exercise price of 555 yen per right.

Exercise period and tax implications

The exercise period for general investors runs from September 6 to October 15, 2024, after which unexercised rights will be acquired by the company. These rights will not be listed or tradable on exchanges. Foreign shareholders may face restrictions on exercising rights, and exercising rights for less than 100 shares results in holding fractional shares. The company expects no tax implications when rights are allocated or exercised.

Metaplanet’s decision to allocate the majority of raised funds to Bitcoin is based on the cryptocurrency’s potential for long-term appreciation and its ability to hedge against currency depreciation, particularly the yen. This investment strategy comes amid Japan’s challenging economic environment, characterized by high debt levels and prolonged negative real interest rates.

The company views Bitcoin as a strategic financial reserve asset that aligns with its vision of leveraging innovative financial strategies to enhance corporate value and growth. Metaplanet CEO Simon Gerovich stated that the firm was “beginning to show characteristics associated with zombie companies” before strategically pivoting into Bitcoin.

Corporate bond allocation

In addition to the Bitcoin purchase, Metaplanet plans to allocate 1 billion yen ($6.91 million) for corporate bond redemption and 500 million yen ($3.46 million) for working capital. The company currently holds 245.992 Bitcoins with a market value of 2,461 million yen as of July 31, 2024.

According to its Q & A page, Metaplanet chose this method to strengthen its financial base and increase corporate value, emphasizing that it provides equal opportunity to all shareholders while raising capital. The company advises shareholders to carefully consider the provided information and make investment decisions at their own responsibility.

In July, Metaplanet’s shares soared by nearly 10% after the firm secured another Bitcoin purchase, marking a strategic emphasis on crypto as a major treasury asset. The company’s Bitcoin holdings are estimated to be at 246 BTC, worth around $13 million at the time of writing.

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