Benchmark maintains a "Buy" rating on Metaplanet, but the target price is lowered by over 50%

Mars Finance News: On February 18, Benchmark maintained a “Buy” rating for Metaplanet but cut its target price by more than half, citing that the company’s latest financial report highlights the “prospects and risks” of its aggressive Bitcoin accumulation strategy. Benchmark analyst Mark Palmer, in a research report on Tuesday, lowered the target price of this Tokyo-listed Bitcoin reserve company from 2,400 yen to 1,100 yen. He wrote that recent performance shows the “hope and danger” of the company’s Bitcoin-centric financial strategy. The stock is traded over-the-counter in the U.S. under the ticker MTPLF, with a current trading price of about $2.20. Earlier this month, it briefly fell to around $1.85, approaching the lowest level since the company began its Bitcoin purchasing strategy in April 2024. Metaplanet reported a net loss of $619 million for the fiscal year ending December 31, mainly due to unrealized valuation losses on its holdings caused by Bitcoin price declines later last year. Despite this, its operational performance improved significantly, with revenue and profit increasing due to Bitcoin-related financial services activities. A core pillar of Benchmark’s investment thesis is Metaplanet’s continuously expanding Bitcoin revenue-generating business, which earns income through Bitcoin-related options and yield strategies. Analysts believe this segment allows the company to pay dividends on newly issued perpetual preferred shares without selling its core Bitcoin holdings, thereby funding future Bitcoin purchases through operating cash flow (rather than asset sales). The company added that investor demand for these preferred instruments is likely to determine whether Metaplanet can successfully continue expanding its financial reserves while controlling dilution risks.