Metaplanet Shares Plummet as Bitcoin Strategy Faces Scrutiny

Japanese Bitcoin firm Metaplanet sees valuation collapse after $625M loss from Bitcoin impairment, despite surging operational revenue from crypto options trading.

The equity valuation of Japanese Bitcoin treasury firm Metaplanet has collapsed, with its shares trading near the value of its underlying cryptocurrency holdings. This represents a dramatic de-rating from multiples exceeding 20x earlier in 2024 and 10x at the start of 2025. The stock has now shed more than 80% of its value from its peak levels.

Fiscal Report Triggers Billions in Paper Losses

The catalyst for the severe downturn was the release of fiscal year 2025 results on February 16. Metaplanet reported a net loss of 95 billion yen (approximately $625 million). This was primarily driven by a 102.2 billion yen accounting impairment charge against its Bitcoin reserves, mandated by Japanese mark-to-market accounting standards for cryptocurrency holdings.

In stark contrast, the company's operational performance showed remarkable strength. Revenue surged by 738% to 8.9 billion yen, while operating profit skyrocketed 1,694% to 6.3 billion yen. A significant contributor was the "Bitcoin Income Business" segment, which generated premium income of 7.98 billion yen from options trading on its Bitcoin holdings, up sharply from just 691 million yen the previous year.

Leadership Defends Corporate Strategy

Facing public criticism on social media, CEO Simon Gerovich addressed concerns on February 20. Critics had alleged the company purchased Bitcoin at peak prices, remained silent during market corrections, and took loans against its holdings without sufficient transparency.

Gerovich countered that all Bitcoin wallet addresses are publicly visible and tracked via a live dashboard for shareholders. He emphasized that the reported losses represent unrealized mark-to-market fluctuations on assets the company continues to hold, not sold positions.

Analyst Firm Slashes Price Target Amid Acknowledgment of Strengths

Investment bank Cantor Fitzgerald revised its outlook on February 18, cutting its price target for the OTC-traded shares from $6 to $3. The firm maintained its "Overweight" rating, however, acknowledging Metaplanet's continued accumulation of Bitcoin. Holdings grew to 35,102 BTC by the end of 2025, compared to 1,762 BTC a year earlier. Analysts stated the target reduction was an adjustment to the steep decline in the cryptocurrency's market price.

Funding Model Loses Efficacy in Current Climate

A core challenge for Metaplanet is the failure of its primary capital-raising mechanism. The strategy of issuing moving-strike warrants to the EVO Fund is only functional during bull markets. With the share price trading far below exercise prices and the market-value-to-net-asset-value (mNAV) ratio near 1x, this funding source has effectively dried up.

The company has pivoted to issuing preferred shares. Its Class B "MERCURY" shares, offering a fixed 4.9% dividend, raised 21.2 billion yen. Another Class A instrument ("MARS") provides a variable dividend between 1% and 8%. In Japan's low-interest-rate environment, where the benchmark rate stands at 0.75%, these yields remain attractive to domestic investors.

Ambitious Targets Persist Despite Headwinds

Management's outlook for the current fiscal year 2026 forecasts an 80% revenue increase to 16 billion yen. Operating profit is projected to reach 11.4 billion yen. The Bitcoin income segment alone generated 4.3 billion yen in the fourth quarter, an annualized run-rate that exceeds the full-year forecast.

Long-term ambitions remain intact. Metaplanet reaffirmed its goal to accumulate 100,000 BTC by the end of 2026, targeting 210,000 BTC by 2027—approximately one percent of the total Bitcoin supply. On February 20, the shares closed at 319 yen in Tokyo, a far cry from their 52-week high of 1,930 yen.