Metaplanet Stock Soars on Bitcoin Bet, Triggers Global Short Squeeze Frenzy

Japanese company Metaplanet (3350.T), dubbed "Asia's MicroStrategy" for its aggressive Bitcoin accumulation strategy, has seen its stock price surge to unprecedented levels, triggering trading halts on the Tokyo Stock Exchange (TSE) for two consecutive days and igniting speculation of a potential global short squeeze.

Metaplanet's shares have been on a parabolic ascent, propelled by its strategic pivot to a Bitcoin-first treasury and a series of significant Bitcoin purchases. On Monday, the company added another 1,004 BTC, bringing its total holdings to 7,800 BTC, currently valued at over $800 million. This makes Metaplanet the 10th largest public company by Bitcoin holdings, surpassing even El Salvador's national treasury.

The company's Q1 FY2025 earnings further underscored its success, with 88% of its $6 million revenue attributed to Bitcoin options trading and a remarkable 170% BTC yield. Metaplanet aims to reach 10,000 BTC by the end of 2025, funding these acquisitions through zero-coupon ordinary bonds.

Trading Halts and a Brewing Short Squeeze

The intense investor interest has led to extraordinary volatility in Metaplanet's stock. On Tuesday, trading was halted at 783 yen due to a sharp price move, and on Wednesday (May 21), the share price rocketed to its daily limit-up, closing at 933 yen before being halted again. These halts are in accordance with TSE rules, which implement circuit breakers for rapid price fluctuations and daily price limits to manage extreme movements.

However, these trading restrictions on the TSE have created a unique predicament for short sellers. With Metaplanet being the most shorted stock in Japan, a significant number of short positions are now under immense pressure. The limited liquidity on the Tokyo exchange due to the halts is forcing these short sellers to seek alternative venues to cover their positions.

This has led to a scramble for shares on international exchanges where Metaplanet is also listed, specifically Germany's DN3 and the U.S. OTC ticker MTPLF. These markets, however, offer significantly lower liquidity compared to the TSE, meaning short sellers are now competing with global investors for a limited supply of shares, often at prices above their initial short-sale levels.

Metaplanet CEO Simon Gerovich highlighted this dynamic on X, sharing data that indicates over 25% of the company's shares have been borrowed for short positions. This high short interest, combined with constricted supply and surging demand, has all the ingredients for a massive short squeeze.

Market observers are drawing parallels to the GameStop phenomenon, suggesting that Metaplanet could be the next major meme stock powered by Bitcoin. As Bitcoin has just hit a new all-time high , the pressure on short sellers is expected to intensify, potentially creating a chain reaction where buying on less liquid international markets drives prices even higher, leading to further halts in Japan.