Metaplanet Faces Mounting Scrutiny Over Bitcoin Strategy and Financials

Metaplanet's CEO addresses criticism over Bitcoin buys and options strategy as shares fall 85% from peak and unrealized crypto losses exceed $1.2 billion.

Metaplanet, the Japanese company known for its aggressive Bitcoin acquisition strategy, is confronting growing criticism from market observers. Concerns center on the timing of its cryptocurrency purchases, a perceived lack of transparency, and its management of shareholder capital. In response, CEO Simon Gerovich has taken a public stance this week to address the allegations, which emerge against a backdrop of a sharply declining share price and substantial unrealized losses on its Bitcoin holdings.

Reports indicate the stock recently traded at 307 yen, a staggering 85% below its all-time high reached in 2025. Concurrently, the company's unrealized losses on its Bitcoin positions are estimated to have surpassed $1.2 billion.

Financial Results Reveal a Mixed Picture

The debate intensifies following the release of weak corporate results. Metaplanet's financial statement for fiscal year 2025, published on Sunday, showed a net loss of 95 billion yen (approximately $619 million). This was primarily driven by a 102.2 billion yen (roughly $666 million) write-down on its Bitcoin reserves, a consequence of mandatory Japanese mark-to-market accounting rules.

Operationally, however, the report told a different story. The company posted robust growth, with operating profit soaring to 6.2 billion yen—a 1,694% increase year-over-year. Revenue surged 738% to 8.9 billion yen. Notably, 95% of this revenue originated from its "Bitcoin Income" segment, which is largely fueled by income from options premiums.

CEO Addresses Transparency and Timing Concerns

Gerovich directly engaged with anonymous critics on the platform X last Thursday. These critics had accused Metaplanet of withholding key financial details and shifting toward riskier yield-generation strategies. The CEO stated he takes "public responsibility" for his statements and the company's actions. As evidence of transparency, he pointed to the real-time disclosure of the company's cryptocurrency wallets and a live dashboard provided for shareholders.

On the issue of purchase timing, Gerovich acknowledged a sensitive point: a significant Bitcoin acquisition in September occurred near a "local high." He emphasized, however, that Metaplanet's strategy is not focused on short-term trading but on systematic accumulation.

Controversial Options Strategy Defended

A central point of contention remains Metaplanet's use of put options and put spreads. The firm employs this strategy to generate premium income and potentially acquire Bitcoin below prevailing market prices. Gerovich defended the approach, arguing that selling put options does not constitute a "bet" on rising Bitcoin prices. Instead, he described it as a method to lower the effective entry price and monetize market volatility.

Following his public remarks, the company's shares reportedly rallied intraday by more than 3% on Friday.

Analyst Downgrade and Ambitious Targets

The company also faced headwinds from analysts. Cantor Fitzgerald halved its price target for the over-the-counter traded shares to $3.00 from $6.00 on Tuesday, though it maintained an "Overweight" rating. The firm cited Metaplanet's holding of 35,102 BTC at the close of fiscal 2025 as a basis for its assessment.

Despite the high cost basis contributing to its paper losses, Metaplanet maintains ambitious goals. The company currently holds 35,102 BTC with an average acquisition price of about $107,000 per Bitcoin. With Bitcoin trading around $67,000 at the time of Gerovich's statements, the scale of the unrealized losses becomes clear.

Undeterred, the company's "555 Million Plan" outlines targets of 100,000 BTC by the end of 2026 and 210,000 BTC by 2027. For the 2026 fiscal year, Metaplanet has projected revenue of 16 billion yen and an operating profit of 11.4 billion yen.