The Ultimate Treasury Asset
Dear Readers,
We have some exciting news—we’ve added another tremendous bitcoin brain to the TBL mix of writers. I’d like to formally introduce Johan Bergman, who has already impressed TBL Pros with his excellent on-chain and MSTR analysis. Johan is joining us for regular coverage on bitcoin corporate strategies, on-chain breakdowns, bitcoin options, and the market for this incredible orange asset that we all obsess over. One of us! I’m certain he is already providing more value to you, the Reader.
Sincerely,
Nik
GameStop, Strategy, Metaplanet, Tether, & Marathon are stacking
These are interesting times, to say the least. Significant developments are occurring across nearly every aspect of the financial markets. In this article, I’ll focus specifically on the latest news regarding Corporate Bitcoin Treasury strategies—particularly the major events from week 13, which proved especially eventful.
Highlights included GameStop announcing plans to issue convertible debt with the intention of using proceeds to acquire Bitcoin; Strategy executing another substantial bitcoin purchase; Tether converting a portion of its profits into bitcoin reserves; Metaplanet continuing to expand its Bitcoin strategy; and Marathon Digital announcing another At-The-Money (ATM) equity program.
However, our goal is not merely to report these events. Instead, we aim to analyze and distill essential information, enabling you to form your own informed opinion on these strategic moves. Without further ado, let’s dive in.
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GameStop
First up, GameStop. It seemed to me that this development took an unusually long time to materialize. In my opinion, it was quite evident that a corporation transitioning from the physical realm to the digital realm—especially one with a strong, loyal, and committed shareholder base—would benefit significantly from implementing a Bitcoin treasury strategy.
The first key reason is wealth preservation for future strategic moves. Struggling with technological transition isn't necessarily a weakness; rather, it can signify a period of reinvention and innovation. Sometimes, the perfect solution isn't available immediately. Holding wealth in Bitcoin can allow a company to preserve purchasing power and leverage Bitcoin’s network growth. Ideally, this provides sufficient leeway for the company to transition effectively and create value in the emerging digital landscape.
The second reason, particularly relevant to GameStop, involves deterring hedge funds from aggressively shorting the company's stock. Holding Bitcoin on the balance sheet introduces a powerful variable: Bitcoin’s price performance is uncorrelated to the company's operational performance. If GameStop accumulates significant Bitcoin holdings, its stock price may rise even if the operational business faces challenges. This introduces unquantifiable risk for short sellers, making it difficult to statistically predict the likelihood of the community purchasing more stock, thus enabling additional ATM programs to fund further Bitcoin acquisitions, potentially severely disrupting short positions.
In this way, Bitcoin could serve as a strategic shield against predatory market practices.
GameStop is using Strategy’s playbook, which was expected when Ryan Cohen met with Michael Saylor to discuss business. Basically, they’re using the two levers that Strategy used in the last 4 years, issuing more common stock and issuing convertible debt.
At the time of writing, it is not known how much bitcoin they actually acquired. Last year, 2024, they performed three At-The-Market Programs and gathered an astonishing $3.47 billion. They capitalized on a high stock valuation and collected the money themselves instead of short sellers taking that value. They still have that cash sitting on their balance sheet, waiting to deploy it for future investments to revitalize their business model.
The convertible notes issuance will likely bring in an amount around $1.3 billion. The question is when GameStop is going to deploy that capital to buy bitcoin with it. On-chain watchers are speculating with some of the Coinbase transfers.
Soon, we’ll know.
Strategy ($MSTR)
On Sunday, Michael posted another "we need more orange" type of tweet, hinting at a new Bitcoin purchase. I won't delve deeply into Strategy’s Bitcoin strategy here—I previously wrote an extensive piece on this subject. If you're unfamiliar with it, I'd recommend checking that out first. But let’s dive deeper into the details.
The amount of Bitcoin Strategy acquired is staggering. Yes, we've seen large purchases before, but this time they made the acquisition without proceeds from newly issued convertible bonds. Their BTC yield target for 2025 is 15%, and with this recent purchase, their year-to-date BTC yield already stands at 11%.
I broke down the capital raised by each instrument they used to better understand the underlying mechanics.
The largest portion, $1.2 billion, was raised through selling newly minted common stock. Only $18.52 million came through the ATM issuance of $STRK. The remainder of the capital was raised through the initial public offering of $STRF, the newest addition to their preferred stock family.
If my reasoning from the previous deep dive into Strategy is correct, it would be preferable to issue more preferred stock. However, given its relatively recent introduction, the trading volume isn't yet sufficient to comfortably absorb millions of shares. This presents a tension between theoretical optimization and practical execution.
I plan to conduct a thorough analysis on what factors matter most when utilizing common stock ATMs. Specifically, I'll investigate whether it's more beneficial to focus on the high premium between the stock price and the underlying Bitcoin value per share, or the actual price of Bitcoin itself. In theory, the optimal strategy is to issue common stock only when the mNAV exceeds 2, and ideally is above 3 or higher, maximizing value creation. However, a high mNAV usually coincides with Bitcoin trading at a (local) peak. Thus, the critical question becomes: where do these factors intersect? Is it better to have a high mNAV coupled with a high Bitcoin price, or a lower mNAV that allows for accumulating Bitcoin at lower prices? I hope to shed more light—and perhaps deliver some alpha—on this topic in the future.
Metaplanet
On January 28, 2025, Metaplanet announced their ambitious "21K / 21M" plan. The plan includes bold targets: acquiring 21,000 BTC by 2026 by issuing 21 million shares. However, please note that a 10:1 stock split occurred on Monday, March 31, 2025, converting the original 21 million shares into 210 million shares post-split.
Their key performance indicators (KPIs) for 2025 involve reaching 10,000 BTC by year-end, targeting a BTC yield of 35% per quarter to achieve this milestone.
Metaplanet has made headlines with its sophisticated approach to financing its Bitcoin accumulation strategy. Japanese law doesn't allow for At-The-Market offerings of common stock, so Metaplanet needed another mechanism to issue shares and use the proceeds to buy Bitcoin.
Metaplanet's arrangement involves issuing zero-coupon ordinary bonds to EVO Fund—essentially, EVO provides upfront capital without receiving interest payments. These bonds are redeemed using proceeds generated by the exercise of stock acquisition rights (SAR) granted to EVO Fund.
Here's how it works:
Bond Issuance: Metaplanet issues zero-coupon bonds to EVO Fund, raising significant capital upfront. These bonds typically have short maturities (around six months).
Stock Acquisition Rights (Warrants): EVO Fund simultaneously receives warrants allowing them to buy Metaplanet shares at the previous day's closing price—meaning no explicit discount is given.
EVO Fund's Incentive: EVO Fund profits from volatility in Metaplanet's stock price. For example, if yesterday's closing price was 400 JPY and today's market opens at 450 JPY, EVO Fund can immediately capture a 50 JPY per-share gain by exercising the warrants and selling the shares.
For EVO Fund, this opportunity falls under the category of an arbitrage trade. They're essentially arbitraging the difference between the exercise price and the market price—and they can time it strategically. For example, they may earn around 3% to 5% per issue. If they start with 2 billion JPY, after one bond is redeemed, they might have around 2.060 billion JPY to lend out again. If they can lend out the same 2 billion JPY multiple times a year, the yield compounds towards 15% or 20% per year.
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