As a seasoned analyst with decades of experience under my belt, I have seen many companies adopt diverse strategies to expand their portfolios. Metaplanet Inc.’s decision to issue bonds for Bitcoin purchases is undeniably an unconventional move, but it’s not without merit.
Metaplanet Incorporated announced that they have sold a fifth series of their Regular Bonds, worth 5 billion yen, through a private agreement with EVO FUND, which they will use to purchase additional Bitcoins.
On December 20, today’s date, the company announced the launch of its fifth series of Ordinary Bonds, amounting to approximately $31.91 million, via EVO FUND. This move comes shortly after the company’s previous announcement about potentially issuing up to 5 billion yen in Ordinary Bonds.
The money raised from this stock issue will be used to buy Bitcoin (BTC), as explained in the company’s announcement on November 28, 2024, about the issuance of the 12th Series Stock Acquisition Rights with an Adjustment Provision and the related Stock Acquisition Rights Purchase Agreement.
Metaplanet will sell 5.0 billion yen worth of Ordinary Bonds to quicken their Bitcoin acquisitions; they plan to repay this loan using the funds received from exercising warrants.
— Metaplanet Inc. (@Metaplanet_JP) December 20, 2024
As a crypto investor, I find myself in a position where I hold the 5th Series Bonds. Unlike traditional bonds, these ones don’t pay interest. Instead, when the principal is returned, it’s equivalent to 1 yen for every 1 yen of the bond amount, which translates to approximately $1.59 million (¥250 million) per bond. The full repayment is scheduled for December 20, 2024, but EVO FUND has the option to redeem these bonds early by giving Metaplanet Inc written notice. The bonds can also be cashed in early if the proceeds from the exercise of the 12th Series Stock Acquisition Rights exceed multiple times the bond principal amount integral multiples. The bonds will officially mature on June 16, 2025.
The loans provided won’t have a guarantee or collateral, and they will exclusively be offered to EVO FUND. As per Articles 702 of the Companies Act and 169 of the Enforcement Regulations for the Companies Act, no bond trustee will be appointed. Metaplanet Inc., located in Roppongi, Minato-ku, Tokyo, will pay back both principal and interest from their office.
As an analyst, I’m sharing that Metaplanet Inc.’s forthcoming issuance won’t significantly influence our overall financial position for the fiscal year concluding on December 31, 2024. However, it’s important to note that they will promptly update us on any significant changes or potential impacts this deal might have on their financial forecast.
Metaplanet is borrowing funds to buy Bitcoin
Metaplanet doesn’t follow the same approach as buying Bitcoin (BTC) directly; instead, they are borrowing funds and selling bonds to investors such as EVO FUND. Unlike using their own money, these funds must be paid back regardless of BTC’s performance. This method enables them to invest in BTC without depleting their cash reserves, but it also introduces financial responsibilities and risks if the Bitcoin value decreases. Essentially, they are investing in BTC on credit, with a commitment to repay that debt at a later time.
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2024-12-20 14:46