Recent events in the stock market have led to a decline in Metaplanet's shares, attributed to the reopening of short positions by major investment banks.
Overview of Metaplanet's Stock Market
Metaplanet shares dropped 8% after UBS reopened its short positions. The company, as Asia's largest Bitcoin holder, faces pressure from Wall Street due to weak Bitcoin prices and slumping share prices, threatening its business model and ability to raise funds. Currently, Metaplanet's share price is down more than 31% over the past month.
Major Short Positions in Metaplanet
Morgan Stanley MUFG holds the largest short position in Metaplanet, with nearly 20 million shares. While UBS reopened its short position, investment banks like Jefferies and JPMorgan also remain short. In contrast, Goldman Sachs and Citigroup have cut down their short positions. The cost to borrow Metaplanet shares for shorting has surged to 54%, indicating a scarcity of available shares for lending.
Metaplanet's Bitcoin Accumulation Strategy
Metaplanet ranks as the sixth-largest Bitcoin holder globally, with 20,136 BTC. Despite Bitcoin's price remaining flat, Metaplanet’s shares slid more than 15%. The company's premium, representing the difference between its capitalization and the value of its Bitcoin holdings, has significantly narrowed. The company's accumulation strategy for Bitcoin raises concerns among analysts due to the decreasing premium.
Despite the challenges and investor pressure, Metaplanet is continuing its efforts to raise capital and expand its Bitcoin reserves, planning to issue 385 million shares to raise 205 billion yen.
