Metaplanet loses $725 M in Q1 due to Bitcoin, but increases its reserves to 40,177 BTC

The decline of digital assets continues to weigh on the companies most exposed to the market. In Japan, Metaplanet provides a striking example with a quarterly loss of 725 million dollars, linked to the drop in its bitcoin holdings. However, the group is not slowing down its strategy and is further increasing its reserves in a context where its business model is evolving rapidly.

Bitcoin: a value drop that weighs heavily on the accounts

While Bitcoin regains more favorable macro signals on the markets, its recent decline continues to weigh on heavily exposed companies. For Metaplanet, this drop was directly reflected in the first-quarter accounts, with a reported loss of 114.5 billion yen, about 725 million dollars.

A year earlier, the deficit was 5 billion yen, or 31 million dollars. The gap shows the extent of the deterioration in the Japanese group’s results. It also highlights the strong sensitivity of corporate balance sheets to changes in digital assets.

During the quarter ended March 31, the company added 5,075 units to its digital reserves. This increase represents 14.5% more compared to the previous quarter. With a recent price near 79,300 dollars, its total portfolio reached 40,177 BTC, for an estimated value of 3.18 billion dollars.

Since April 2024, the group has been accumulating this digital asset and is now among the largest private holders. However, the price correction, after last year’s peaks, has reduced the book value of its positions.

A still fragile stock despite an expanded investor base

The stock closed Wednesday at 327.00 yen. Over one month, it gained 5.8%, supported by a more stable market and a bitcoin price near 80,000 dollars. However, the stock remains down 45% over one year, highlighting the persistent pressure on the valuation.

At the same time, Metaplanet indicates that its number of shareholders has grown significantly. The company claims about 250,000 investors, compared to 63,600 the previous year. This increase shows a broader market interest, although the stock price has not yet regained its past level.

The change in the business model also explains this evolution. The hotel activity used to form the core of its revenue. Today, most of it comes from the sale of bitcoin-related option contracts. In the first quarter, this segment generated 15.8 million dollars, compared to 4.8 million a year earlier.

This growth gives the group a revenue source more aligned with its digital asset strategy. It also increases its exposure to market fluctuations. Thus, results remain dependent on the value of bitcoin and demand for these financial products.

Metaplanet adjusts its financing and dividend projects

CEO Simon Gerovich presented a two-pronged approach. The group wants to consolidate its position in Bitcoin with discipline while developing services built on this foundation. He states in a post on X:

Our ambition runs along two tracks: continuing to build our Bitcoin position with discipline and patience while developing the services and businesses that operate atop that foundation.

Simon Gerovich, CEO of Metaplanet.

This orientation confirms the central role of digital assets in its new financial identity. In this logic, Metaplanet is preparing a preferred share inspired by the STRC product used by Strategy. This type of instrument aims to support group financing while the company continues to structure its model around its reserves and derivative activities.

Furthermore, Gerovich acknowledged that “the MARS and MERCURY dividend products have not yet been launched.” Presented in November, they require more time than expected. The executive nevertheless indicated that “Metaplanet remains committed to their marketing.”

The company is also adapting their design to Japanese market practices. Local listed companies usually distribute dividends once or twice a year. This difference explains the ongoing adjustments, especially compared to the STRC model, which pays monthly dividends.

In the short term, attention will remain focused on bitcoin’s evolution, income from options, and the launch of announced products. If the market stabilizes, the company could reduce the volatility of its accounts while continuing its financial repositioning. Despite some negative sentiment around the bitcoin rally, a continued rise could improve the value of its reserves without erasing risks related to high market exposure.