Tokyo-listed Bitcoin treasury company Metaplanet Inc. has launched a share repurchase initiative valued at 75 billion Japanese yen (approximately $500 million), which is backed by a credit facility secured by Bitcoin. This decision comes in light of a drop in the company’s market-based net asset value (mNAV) below 1.

On Tuesday, the firm stated that this measure aims to enhance the yield per share of Bitcoin (BTC) and restore investor confidence as the stock trades for less than the value of their Bitcoin assets.

The board has approved a buyback program that allows the acquisition of up to 150 million common shares, which constitutes 13.13% of the total shares in circulation. The buyback process will be active from Wednesday until October 28, 2026, with transactions taking place on the Tokyo Stock Exchange as part of a discretionary trading strategy.

To fund this initiative, Metaplanet secured a Bitcoin-backed credit line that permits borrowing of up to $500 million, providing flexibility for share repurchases or further Bitcoin purchases. This facility may also function as interim financing for a proposed issue of preferred shares.

Metaplanet announced $500 million share buyback. Source: Metaplanet

In related news, the company’s mNAV, which reflects its total value against its Bitcoin resources, plunged to a low of 0.88 last week before slightly bouncing back to 1.03, according to official data. Metaplanet has paused new Bitcoin buys amidst the decline in mNAV. Currently, the firm possesses 30,823 BTC (worth $3.5 billion) after its latest acquisition of 5,268 BTC on September 30. Despite these conditions, they maintain their ambition to amass 210,000 BTC by 2027.

In another sector update, ETHZilla recently announced its own $40 million buyback following stock trading at a significant discount to NAV. The company mentioned that they had already repurchased about 600,000 shares valued at $12 million since October 24 as part of a $250 million buyback program.

Analysts have noted that several Bitcoin treasury firms have experienced significant losses in their NAVs, resulting in a loss of billions in paper wealth. This situation arises from the rapid expansion of Bitcoin treasury firms, which issued stocks at valuations that far exceeded their actual BTC equivalents, leading to substantial losses for retail investors while these companies have gathered real Bitcoin.

In financial ratings news, S&P Global Ratings has assigned a “B-” credit rating to Michael Saylor’s Strategy, categorizing it as speculative and non-investment grade but maintaining a stable perspective. The agency highlighted vulnerabilities such as a heavy reliance on Bitcoin, minimal diversification in business, and weak capitalization.