Yesterday, Oct. 28, Metaplanet authorized a share buyback program disclosing a Bitcoin (BTC)-secured credit facility of up to $500 million. This capital allocation tool works best when the stock trades below its market-to-net-asset-value ratio, amplifying gains in Bitcoin rallies and magnifying losses in drawdowns.
The Tokyo Stock Exchange filings set a buyback cap of ¥75 billion, or 150 million shares, over the next year, and approved a credit facility “secured by BTC” held with a custodian.
For reference, Metaplanet holds 30,823 BTC and states buybacks become “most effective” when the stock trades below 1x mNAV, which is market capitalization divided by net asset value.
Bitcoin treasury companies function as levered, flow-driven vehicles rather than simple proxies for spot Bitcoin. So, does recent outperformance reflect sustainable a business model or a momentum cycle that will fade when Bitcoin stalls or mNAV premium compresses?
Leverage and buybacks drive equity convexity
A Bitcoin-collateralized credit line used to repurchase shares increases per-share Bitcoin exposure and typically pushes the equity’s mNAV back toward or above 1x during rallies.
The exact structure increases downside convexity if Bitcoin falls or the mNAV premium compresses, because debt remains fixed. At the same time, the collateral asset fluctuates, and share-count reductions magnify per-share volatility.
Strategy has deployed convertible debt and at-the-market equity programs across multiple cycles, delivering equity outperformance during Bitcoin rallies and sharp underperformance during drawdowns.
Semler Scientific funded treasury growth through ATM issuance and later transactions, exhibiting a flow-driven behavior in which equity returns diverge from spot Bitcoin returns during premium cycles and capital-structure moves.
Recent performance illustrates that dispersion. Over the past 30 days, Strategy’s stock declined roughly 13%, Metaplanet’s US over-the-counter listing fell approximately
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Author: Gino Matos
