Metaplanet repurchases ¥19.3B of shares under new buyback program

A ¥19.3 billion share repurchase has reduced a bitcoin treasury's common-share base as a convertible-bond financing introduces potential future dilution. Metaplanet Inc. TYO3350, the Japanese bitcoin treasury company, reported buying 73.98 million ordinary shares on Wednesday.

The Oct. 14 result notice records an outlay of ¥19.309 billion at ¥261 a share. That is executed spending under a ¥60 billion authorization, rather than the value of the entire buyback program.

A U.S. treasury peer closed lower on Wednesday. Shares of Strategy Inc NASDAQMSTR NASDAQSTRC, the U.S. bitcoin treasury and analytics-software company, closed at US$143.24, down 5.87 per cent, on Nasdaq at 4:00 p.m. EDT on Wednesday.

Metaplanet linked the repurchase to mitigating the short-term supply-and-demand impact of convertible bonds due in 2031. Its Oct. 13 financing presentation scheduled issuance for Oct. 29, so the completed common-share purchase precedes the planned bond closing.

The Purchase Uses Part Of A ¥60 Billion Authorization

The acquisition comprised exactly 73,981,400 shares through the Tokyo Stock Exchange's off-auction ToSTNeT-3 system. The result notice gives the same cumulative share count and spending for the new program as for this transaction, identifying its initial execution.

Subtracting that purchase from the Oct. 13 authorization leaves capacity for about 126.02 million more shares and ¥40.69 billion of further spending. Those are remaining ceilings, and the program constrains purchases by both share count and total cost.

The original Oct. 13 plan contemplated an off-auction purchase of up to 96.93 million shares for approximately ¥25.3 billion. The executed acquisition was smaller, consistent with the presentation's warning that purchases could fall short depending on sell orders.

The authorization covers up to 200 million ordinary shares, equivalent to 14.7 per cent of issued ordinary shares excluding treasury stock as of Sept. 30. That percentage describes the program ceiling against a dated share base; it does not measure the completed transaction against a fully diluted denominator.

Conversion Could Add Shares After The Repurchase

For a bitcoin-per-share calculation that excludes treasury stock, buying back ordinary shares reduces the denominator. If bitcoin holdings remain unchanged, each remaining share represents a larger fraction of those holdings, although the Oct. 14 result notice supplies no updated bitcoin-per-share figure.

The bonds carry stock-acquisition rights, creating a possible future increase in the common-share count. Any eventual bond conversion would add equity, and the executed repurchase count alone cannot establish the net share count after conversion and subsequent capital transactions.

Metaplanet's Oct. 13 supplementary presentation described replacing part of its interest-bearing, bitcoin-collateralized borrowings with unsecured, zero-coupon funding.

"The primary purpose is to improve our debt structure and secure financial flexibility, not to reduce total liabilities," Metaplanet said in the Oct. 13 presentation.

The presentation envisaged share repurchases before bond closing and partial repayment of credit-facility borrowings in November. It also allowed unused buyback proceeds to fund additional market repurchases or borrowing repayments.

The Oct. 13 presentation labelled its conversion price, potential share count and proceeds allocations as estimates awaiting pricing. Metaplanet subsequently listed an Oct. 14 terms-determination notice; the earlier estimates do not establish final conversion dilution.

A separate part of that prepricing plan envisaged lending up to 55 million shares held by chief executive Simon Gerovich, through his asset-management company, to the lead manager and others. The presentation described existing CEO-held shares, so that lending figure cannot be treated as a count of newly issued conversion shares.

Strategy Repurchased Preferred Stock While Selling Common Shares

The distinction between securities also runs through the sector's latest capital-management announcements. Strategy reported spending US$192.4 million on Stretch preferred-stock repurchases during Oct. 5 to 11, while selling common shares to help fund bitcoin purchases.

During the period ending Oct. 11, Strategy sold 125,183 common shares for US$21 million net. It bought 250 bitcoin for US$21.5 million, including fees and expenses, with the balance supplied from cash.

Mugglehead's earlier account of Strategy's common-share sales and preferred-stock repurchases follows that distinction. Its preferred buyback did not retire common shares, while Metaplanet's Oct. 14 purchase acquired ordinary shares.

Read more: Strategy Inc buys 250 bitcoin and repurchases US$192.4M of STRC

Metaplanet's broader authorization runs until Oct. 13, 2027, allowing further purchases within its limits. The nearer scheduled funding milestone is Oct. 29, the bond issue's closing date set out in the Oct. 13 presentation.