Metaplanet's Bitcoin Strategy Faces Scrutiny Amid Unrealized Losses

Metaplanet shares gain on bullish forecast and new dividend policy, even as its Bitcoin holdings face massive unrealized losses and valuation pressure persists.

Shares of the Japanese Bitcoin treasury firm Metaplanet advanced on the Tokyo Stock Exchange this Thursday. The move came despite the company grappling with substantial unrealized losses exceeding $1.2 billion on its cryptocurrency holdings. Investor reaction appeared focused on the firm's bullish earnings forecast and newly announced dividend policy, though its overall valuation continues to face significant headwinds.

CEO Addresses Criticism of Bitcoin Acquisitions

Metaplanet's leadership has recently confronted anonymous criticism. CEO Simon Gerovich was accused of purchasing Bitcoin at inopportune times and inadequately disclosing financing terms. On February 20th, Gerovich refuted these claims on X, stating all Bitcoin addresses are publicly viewable and shareholders can monitor holdings via a live dashboard. He acknowledged that purchases made in September coincided with a "local high" but emphasized the company's strategy is one of systematic accumulation, not speculative trading.

Ambitious Financial Forecast and Dividend Initiative

Looking ahead, Metaplanet projects a dramatic financial turnaround for the fiscal year ending March 31, 2026. The company anticipates revenue of 16 billion yen and an operating profit of 11.4 billion yen. This would represent an approximate 80% surge in revenue and an 81% jump in operating profit compared to the prior year.

This optimistic outlook stands in stark contrast to the full-year 2025 results, which saw revenue of 8.9 billion yen but a net loss of 95 billion yen. The primary driver of that loss was a 102.2 billion yen accounting impairment of its Bitcoin assets, a requirement under Japanese mark-to-market accounting rules. Notably, the company's operating profit for the last fiscal year skyrocketed by 1,694% to 6.29 billion yen, largely fueled by premium income from Bitcoin put options, which surged from 691 million yen to 7.98 billion yen.

Alongside its forecast, Metaplanet announced quarterly dividend payments for its Class B preferred shares, traded under the name "MERCURY." The firm now utilizes two classes of perpetual preferred shares: "MARS" (Class A, non-convertible, with a variable 1-8% dividend) and "MERCURY" (Class B, convertible, with a fixed 4.9% dividend). The MERCURY issuance raised 21.2 billion yen through a private placement. While preferred shareholders receive these distributions, common shareholders bear the dilution from recent capital increases and warrant issuances.

Analyst Sentiment and Valuation Pressure

Market analysts maintain a cautious stance. Cantor Fitzgerald reaffirmed its Overweight rating on Metaplanet on February 23rd, though it had lowered its price target just five days earlier. The stock has fallen roughly 85% from its 52-week high of 1,930 yen to a recent level around 300 yen. Its 52-week low stands at 284 yen. The market value to net asset value (mNAV) ratio has contracted to just above 1x, a significant decline from peaks exceeding 10x in early 2025 and 20x in 2024.

Substantial Holdings and Aggressive Expansion Goals

With holdings of 35,102 BTC, Metaplanet ranks among the world's four largest publicly traded corporate Bitcoin holders, behind Strategy (formerly MicroStrategy), MARA Holdings, and Twenty One Capital. Its average acquisition cost sits at approximately $107,000 per Bitcoin, which is notably above the current market price range of about $67,000 to $68,000.

The company has outlined an ambitious growth path under its "555 Million Plan." It aims to increase its Bitcoin treasury to 100,000 BTC by the end of 2026 and further to 210,000 BTC by 2027. Achieving this goal would require the acquisition of an additional 175,000 Bitcoin.