Benchmark cuts Metaplanet target, says earnings show ‘promise and peril’ of bitcoin pivot

Benchmark maintained a "buy" rating on Metaplanet but cut its price target by more than half, saying the company’s latest earnings highlight upsides and risks of its aggressive bitcoin accumulation strategy.

In a research note Tuesday, Benchmark analyst Mark Palmer cut his price target on the Tokyo-listed bitcoin treasury firm to ¥1,100 from ¥2,400 (roughly $7.15 and $15.60 respectively), writing that recent results show the “promise and peril” of the company’s bitcoin-focused treasury strategy.

Shares, which trade in the U.S. over the counter under ticker MTPLF, are currently changing hands around $2.20, after briefly falling to roughly $1.85 earlier this month, close to their lowest level since the company began its bitcoin buying strategy in April 2024.

Metaplanet reported a $619 million net loss for the fiscal year ended Dec. 31, largely due to a non-cash valuation loss on its bitcoin holdings as prices declined late last year. Still, operating performance improved sharply, with revenue and profit rising on the back of bitcoin-related financial services activity.

A central pillar of Benchmark’s thesis is Metaplanet’s expanding Bitcoin Income Generation business, which produces revenue through options and yield strategies tied to bitcoin. Analysts said this segment could allow the company to fund dividends on newly issued perpetual preferred shares without selling core bitcoin holdings, helping finance further BTC purchases through operating cash flow rather than asset sales.

The firm added that investor demand for these preferred instruments will likely determine how successfully Metaplanet can continue expanding its treasury while limiting dilution risk.

Bitcoin treasury woes

Metaplanet now ranks as the fourth-largest public corporate bitcoin holder, with 35,102 BTC worth roughly $2.37 billion at current prices. However, with an average purchase price above $107,000 per bitcoin, the company is sitting on an unrealized loss of roughly $1.4 billion.

Even market leader Strategy, which holds more than 717,000 BTC, is currently in the red by roughly $5.8 billion, showing how recent bitcoin weakness has pressured corporate treasury strategies across the sector.

Despite slashing its target price, Benchmark said valuation still implies upside if Metaplanet successfully scales its bitcoin holdings and income-generating businesses, while warning that bitcoin volatility and shareholder dilution remain key risks.