The Tokyo-listed holder said it wanted to prove it could cover its interest-bearing liabilities ahead of seeking a credit rating. The round trip cost about $159.5 million for a net gain of 1,000 coins.
Crypto · FinancialMarkets.com · · Tickers: 3350.T, BTC
Metaplanet has built its identity on accumulating bitcoin. In the third quarter, it sold a large block of it on purpose.
The Japanese company said it sold 10,000 bitcoin during the quarter for about $789.2 million, an average of $78,925 a coin, and bought 11,000 for about $948.7 million, an average of $86,246. The net result was 1,000 more bitcoin, bringing its holdings to 44,000 as of . Its total cost basis is about $4.33 billion, an average of about $98,454 a coin.
Why it sold
The company said it held the sale proceeds in cash to demonstrate it could cover all of its interest-bearing debt, without actually repaying it. The proceeds of ¥124.7 billion exceeded its liabilities net of cash and stablecoins, which stood at ¥122.4 billion. Metaplanet said it intends to pursue a credit rating.
A rating agency judges whether a borrower can meet its obligations. A company that has pledged never to sell its main asset leaves that question open. By selling and holding the cash, Metaplanet showed it would sell if needed.
The cost of the signal
The demonstration was not free. Metaplanet paid about 9.3% more per coin when it bought back than when it sold. In dollar terms, it spent about $159.5 million more on purchases than it received from sales, for a net addition of 1,000 bitcoin. At the repurchase average, 1,000 bitcoin would have cost about $86.2 million. By that measure, the round trip cost about $73 million more than simply buying the extra coins.
The company booked a preliminary U.S. deferred tax asset of about $97 million.
The August question
In August, Metaplanet denied reports that it had sold bitcoin. Its disclosure does not give dates for the sales within the quarter, so it does not show whether any of them had begun by then.
Policy change
Metaplanet also revised its capital-allocation policy. It may now hold up to 15% of its assets in strategic investments, with 85% to 90% in bitcoin, and it outlined a strategy aimed at generating net interest income. Its chief executive has described Metaplanet as the second-largest bitcoin holder among listed companies.
The debate
One view is that this is shrewd credit engineering. A rating could lower the company's borrowing costs by more than the round trip cost.
Another is that it was expensive market timing, selling low and buying high. A third focuses on disclosure, given the August denial and the absence of sale dates.
What would settle it
A rating, and the interest rate on any debt Metaplanet issues afterward, will show whether the trade paid off. Fuller disclosure of the sale dates would answer the timing question.