BitMEX Alpha: The investment logic behind Metaplanet's 700% premium

Original Author: BitMEX

As Bitcoin is back in the spotlight for global investors, publicly traded companies that hold Bitcoin – commonly known as "Bitcoin vault stocks" – have also seen their valuations soar. Japan's Metaplanet (ticker symbol MTPLF) is currently trading at a premium of about 7x mNAV (market capitalization/net asset value), far outpacing the US veteran "Bitcoin Vault" MicroStrategy (MSTR). about 1.8 times. Does this number mean that Metaplanet really has a stronger ability to operate and raise funds, or is it a product of investor sentiment? This article will debunk the logic behind Metaplanet's valuation from three aspects: financing structure, Bitcoin hoarding efficiency and risk.

1. Floating Exercise Price Warrants: Old Wine in New Bottles, or Institutional Breakthrough?

Traditional listed companies often use a combination of "convertible bonds + additional shares" if they want to raise funds quickly to purchase coins. However, once the convertible bond triggers the equity swap, it will often cause a significant dilution to the original shareholders, and the stock price will be under pressure. Metaplanet pioneered the launch of "moving-strike warrants" in Japan, and

the core innovation of Metaplanet's moving-strike warrants is that the strike price is not a one-time lock-in, but is dynamically adjusted according to stock price performance and preset indicators. The company set an initial strike price of 1, 388 yen, which is 1.83% higher than the previous trading day's closing price, a premium design that reflects management's strong confidence in the company's intrinsic value. More importantly, in a highly volatile crypto-related stock environment, this dynamic adjustment mechanism can effectively reduce the vicious cycle of "sell-dilution-sell-sell".

Metaplanet has demonstrated the ultimate focus and strategic clarity in the use of funds. The company invests 96% of the proceeds directly into Bitcoin purchases, with a small amount remaining for bond redemptions and yield-generating strategies such as selling put options. This highly concentrated allocation strategy reflects management's firm belief in Bitcoin as a strategic asset to hedge against Japan's long-term negative interest rate environment and a weak yen

, and the company has set multiple safety thresholds in terms of risk control:

• Minimum strike price protection: Set a minimum strike price of 777 yen to build a last line of defense for shareholders in extreme market conditions, Avoid the risk of unlimited dilution

• Execution of cadence control: The rules of the Tokyo Stock Exchange limit the number of options to be exercised per month to no more than 10% of the outstanding share capital, and reserves the right to suspend the exercise of options to avoid an instantaneous shock

to the market

• Institutional Endorsement: The shares will be sold to EVO FUND, a Cayman Islands fund, which was previously backed Metaplanet's multiple rounds of financing

allow Metaplanet to "raise funds at a high premium" when the stock price is high, "hoard coins at a low price" when Bitcoin adjusts, and realize "sports war" benefits through the time difference. When the stock price is strong, the exercise price of moving-strike warrants will be adjusted accordingly, and the company will be able to issue new shares at a higher price; When the price of bitcoin recovers, the company can use the funds raised to increase its holdings of bitcoin at a lower price.

The effectiveness of this strategy has been proven by the market. Metaplanet's share price has risen more than 275% year-to-date, while its Bitcoin portfolio is worth more than $1 billion, achieving a 225.4% return year-to-date. This double leverage effect – better financing conditions due to rising stock prices and higher Bitcoin appreciation to increase investment returns – has created significant value growth for shareholders.

From the perspective of institutional innovation, Metaplanet's moving-strike warrants are not simply "old wine in new bottles", but a major breakthrough on the basis of traditional warrants, providing a new paradigm of financing tools for enterprises in the field of high-volatility asset allocation.

2. MetaPlanet's hoarding efficiency is high: the number of days for premium replenishment only takes 120 days

The key to measuring whether the premium of treasury stocks can "land" is the speed at which the company converts the premium into physical Bitcoin. The commonly used indicator Days-to-Cover is calculated as follows:

Days-to-Cover = current premium ÷ Daily Hoarding Yield

• Metaplanet: The average daily hoarding yield is about 1.4% -1.5%, Days-to-Cover is about 120 days.

• MicroStrategy: The average daily hoarding yield is only about 0.12%, and the Days-to-Cover is up to 626 days.

In other words, without external variables, Metaplanet could theoretically "fill" the market cap premium with new bitcoins in just four months, compared to nearly two years for MSTR. An efficient hoarding cadence is the core reason why the market is willing to give higher mNAV.

3. Metaplanet uses volatility to "squeeze" bitcoin - you can run fast on this bus, but please fasten your seatbelts

capital formation and premium creation are the two keys to accumulating bitcoin quickly. Metaplanet explicitly takes advantage of its extreme stock price volatility of 2-3 times that is far greater than Bitcoin's, issuing additional shares at high prices when the market is rising sharply, and exercising warrants at favorable times to maximize financing efficiency.

This strategy of "harvesting volatility" allows Metaplanet to:

1. raise funds at high valuations and lock in premiums during the strongest momentum;

2. Buy Bitcoin at a low level when the price falls back or fluctuates.

Essentially, it sets the self-reinforcing flywheel of "higher volatility→ higher premiums, → more volatility" in motion by capturing market imbalances and emotional cycles. The higher the volatility, the better it is for this type of stock – because the spread between high-premium financing, low-priced hoarding, and the faster Bitcoin can be accumulated. The only premise is that investors must be willing to pay a very high premium during periods of frenzy, and this sentiment does not last in every full market cycle.

To understand that "the higher the volatility, the better for Metaplanet", it is important to understand how companies turn sharp fluctuations in stock prices into real assets. Metaplanet's financing vehicle is floating-the-money warrants, which allow new shares to be sold or exercised at a higher than market price during a brief window when the stock price spikes. Because the issue price is higher, the company only needs to dilute fewer shares in order to raise the same size of capital; The loss of equity of old shareholders has been significantly reduced, while the company has more cash in hand.

Next, Metaplanet will immediately convert about 96% of the new funds into Bitcoin. If Bitcoin then pulls back, the company is equivalent to using the premium obtained from the previous "selling stocks at a high price" to "buy coins at a low price", locking in a price difference. When this happens repeatedly, the more volatile the stock price, the wider the spread, and the company quickly solidifies the stock bubble into a visible Bitcoin asset on the books, so the net asset value (NAV) rises faster.

At the data level, the high volatility of stock prices also shortens the "Days-to-Cover" indicator. Covering days measure how long it will take for a company to absorb the existing market cap premium with the new bitcoins. High volatility means that companies can raise and convert more money into Bitcoin each day, so fewer days are needed. For investors, this means that premiums land faster and bubbles are supported by assets sooner.

Of course, the core assumption of this logic is that market sentiment is still willing to pay a high premium to take over newly issued shares during the period when stock prices are high; Once sentiment cools or regulations tighten, the funding window closes, the flywheel stops, and high volatility in stock prices can backfire on companies. As a result, Metaplanet's model is like an engine fueled by emotions: volatility fuels the engine, high premiums accelerate the engine, asset conversion converts kinetic energy into physical bitcoin, and once the sentiment dries up, the engine stalls.

In short, Metaplanet uses volatility as a two-tier lever for financing and hoarding: the more the stock price rises, the higher the financing price; The faster Bitcoin falls, the lower the cost of buying. As long as the emotional cycle can be sustained, it can swing the double-edged sword of "high volatility" to the good side as much as possible.

4. Conclusion: The coexistence of value and bubbles, the key lies in the company's "execution"

Metaplanet's 7 times mNAV is not just on paper:

• it is supported by institutional innovation (floating exercise price) and high-frequency financing + coin hoarding closed-loop;

• At the same time, it is also extremely sensitive to market fluctuations and execution efficiency.

For investors looking to capture the "second MSTR" opportunity, Metaplanet does offer higher leverage and faster cash-out – but with increased uncertainty. To put it simply, if you believe that Bitcoin will remain highly volatile and upward in the long term, and that Metaplanet can continue to execute its flywheel of "fundraising-hoarding-releasing premium", the company's high premium is justified; Conversely, it is prudent to assess the risk of sudden braking in the gap between volatility and regulation.

The core of investment is never to gamble with high leverage, but to identify and manage the cost behind the "benefits". Metaplanet uses volatility as fuel to help hoarding expand rapidly; You also have to use the same reciprocal risk management to get out of this high-leverage game.