Explore Metaplanet's 35x stock surge via Bitcoin strategy with CEO Simon Gerovich. Insights on MNAV, BTC yield, and Japan's crypto future in this exclusive interview.
Timestamped Overview
[00:00:00 - 00:03:53] Introduction and Background
- Host highlights Metaplanet’s rapid stock growth and top global performance.
- Simon Gerovich introduced as CEO, with background in Harvard, Goldman Sachs, and founding Red Planet hotels.
- Discussion on acquiring and rebranding the company to Metaplanet.
- Simon shares his love for Japan from childhood diplomatic posting.
- Pivot to Bitcoin strategy inspired by challenges and Michael Saylor.
[00:03:53 - 00:06:50] Bitcoin Treasury Strategy Explained
- Metaplanet as the fastest-growing stock globally in 2024 with 2400% returns.
- Bitcoin treasury company defined: acquire max Bitcoin for shareholders.
- Inspiration from Michael Saylor’s playbook post-COVID hotel struggles.
- Process of evaluating investments led to Bitcoin as best store of value.
- Positive market reception upon announcement and shareholder approval.
[00:06:50 - 00:09:23] Company Growth and Market Impact
- Stock up 3400% amid Bitcoin’s 150% rise; no expectation of $2B market cap.
- Rise of 70+ companies adopting Bitcoin strategies globally.
- Japan’s high Bitcoin tax (55%) makes Metaplanet a tax-efficient vehicle.
- Investors use retirement accounts for 0% tax on Metaplanet shares.
- Government push for investments via new retirement products.
[00:09:23 - 00:14:02] Valuation Metrics: MNAV and BTC Yield
- MNAV: Market cap or enterprise value over Bitcoin holdings.
- Higher MNAV enables accretive dilution for more Bitcoin acquisition.
- BTC yield: Change in Bitcoin per share; key for assessing dilution.
- Traditional finance views dilution negatively, but welcomed in Bitcoin space.
- Select companies with high MNAV for faster Bitcoin growth.
[00:14:02 - 00:18:19] Strategy Reflections and Execution
- No major changes to strategy; executed well despite Japan dilution limits.
- Thoughtful share sales to avoid harming shareholders.
- MNAV fluctuations tied to Bitcoin buys and share price.
- Compression from dilution increases value long-term.
- Lesson: High initial MNAV enabled aggressive Bitcoin accumulation.
[00:18:19 - 00:21:46] New Metrics and Aggression
- Adam Back’s “months to MNAV cover”: MNAV divided by BTC yield, annualized.
- Measures growth speed justifying premiums; Metaplanet tops at 2.5 months.
- Represents aggression in Bitcoin accumulation.
- Need multiple data points to value new companies like 21 Capital.
- Factors include capital raising methods driving fair valuations.
[00:21:46 - 00:27:19] Financing Tools and Capital Raising
- Interest from banks for structures like convertible bonds (CBs).
- High volatility attractive for CBs, but prefer permanent capital.
- Phase one focus: Equity to build balance sheet before debt.
- Excited about preferred shares in yield-starved Japan.
- Target outright investors; avoid heavy shorting from hedge funds.
[00:27:19 - 00:32:25] Industry Guidance and Competition
- Frequent inquiries for strategy advice; share best practices selectively.
- Distinguish genuine Bitcoin believers from opportunists.
- Support from UTXO Management; upcoming US deals.
- Board includes Tyler Evans, David Bailey, Eric Trump.
- View competition positively; Bitcoin community elevates all.
[00:32:25 - 00:36:22] Bitcoin Outlook and Institutional Interest
- Bullish on Bitcoin due to demand vs. limited supply.
- Urgency to accumulate before unaffordability.
- Institutional investors like Capital Group, Norges Bank focus on growth.
- They encourage fast dilution for Bitcoin per share increase.
- Not fixated on MNAV; value rapid accumulation.
[00:36:22 - 00:39:50] Japan Market and Personal Allocation
- Potential Bitcoin ETF in Japan; would onboard more users.
- NISA accounts limit ~$16K/year at 0% tax.
- Hope for lower direct Bitcoin taxes to expand market.
- Personal allocation: Sold assets for Bitcoin/Metaplanet shares.
- Advise allocating all to Bitcoin as superior store of value.
Notable Quotes
Bitcoin Treasury Strategy
A Bitcoin treasury company has a single purpose, and that is to acquire as much Bitcoin as possible, to accrete more Bitcoin onto the balance sheet on behalf of all shareholders.
Simon Gerovich @gerovich
Dilution in Bitcoin Land
We are wired in traditional finance to think that dilution is bad... That isn't the case in Bitcoin treasury land. Shareholders and investors, they welcome dilution.
Simon Gerovich @gerovich
Valuation Metrics
The higher the multiple, higher MNAV that you have, the easier it is for you to be able to raise capital with limited dilution.
Simon Gerovich @gerovich
Months to MNAV Cover
If you pay three times multiple for a company like ours, it's justified because we can make it all back in two months.
Simon Gerovich @gerovich
Personal Allocation
All I want to do now is just own Bitcoin. I see no better store value over the long term than Bitcoin.
Simon Gerovich @gerovich
Japan's Bitcoin Potential
There are millions of Japanese that love Bitcoin, that want to learn more about Bitcoin... We have a big goal ahead of us, really, to onboard the next million people into Bitcoin in Japan.
Simon Gerovich @gerovich
Institutional Investors
We've seen so many new institutional investors begin to buy our shares... We're uniquely positioned in Asia as being able to give asset allocators exposure to the Bitcoin treasury strategy.
Simon Gerovich @gerovich
Competition in Bitcoin
Bitcoin is different to the traditional world, which is a doggy dog world... Everyone wants to elevate each other. You share your best practices.
Simon Gerovich @gerovich
Bitcoin Outlook
I'm incredibly bullish on Bitcoin. I think fair value is much, much higher than where we are now.
Simon Gerovich @gerovich
MNAV Insights
One of the most important metrics we talk about is MNAV.
Richard Byworth @richardbyworth