Bitcoin News Today: Metaplanet's Bitcoin 'Flywheel' Stalls as Liquidity Tensions Rise

Metaplanet, a Tokyo-listed company that rebranded in 2024 as a Bitcoin treasury firm, is encountering a fundraising challenge following a 54% decline in its stock price since mid-June, according to a report. This downturn has disrupted the company’s capital-raising "flywheel" strategy, which relied on rising equity values to generate liquidity through warrants issued to key investor Evo Fund. With the stock’s sharp fall, exercising these warrants has become less attractive, tightening Metaplanet’s liquidity and hindering its ability to acquire additional Bitcoin at the pace it had envisioned [3].

The firm currently holds 18,991 BTC, making it the seventh-largest public holder of Bitcoin, according to BitcoinTreasuries.NET [3]. It has set ambitious targets to expand its holdings to 100,000 BTC by the end of 2026 and 210,000 BTC by 2027. To meet these goals and sustain its aggressive Bitcoin acquisition strategy, Metaplanet has announced plans to raise approximately 130.3 billion yen ($880 million) through a public share offering in overseas markets. The company is also seeking shareholder approval to issue up to 555 million preferred shares, which could raise as much as 555 billion yen ($3.7 billion). These preferred shares are described as a “defensive mechanism” that would allow the company to raise capital without diluting existing common shareholders, according to CEO Simon Gerovich [3].

In an effort to regain financial traction, Metaplanet has also been added to the FTSE Japan Index following its strong Q2 performance, a move that upgrades the company from a small-cap to a mid-cap stock [1]. This inclusion is expected to draw passive capital flows into the company’s stock and, by extension, into the Bitcoin market. Metaplanet’s stock has already outperformed Japan’s TOPIX Core 30 benchmark index year-to-date, with a reported YTD gain of 187% compared to the index’s 7.2% [1]. However, the stock has declined nearly 27% over the past month [2].

Analysts remain cautious about the viability of Metaplanet’s strategy. According to Eric Benoit of Natixis, the success of the company’s approach will depend heavily on the Bitcoin premium—the difference between the firm’s market capitalization and the value of its Bitcoin holdings. This premium has dropped from over 8x in June to just 2x, raising concerns about potential dilution risks [3]. Metaplanet has also suspended warrant exercises from Sept. 3 to 30 to facilitate the preferred share issuance.

Despite the challenges, Metaplanet and other Japanese firms continue to demonstrate confidence in Bitcoin. Japanese companies added 156.79 BTC to their treasuries in recent weeks, led by Metaplanet’s purchase of an additional 103 BTC for ¥1.73 billion ($11.7 million) [2]. The company’s Bitcoin accumulation strategy has drawn comparisons to other global corporate holders, including Coinbase and Tesla, and has positioned it as Japan’s largest public Bitcoin treasury firm by holdings. CEO Gerovich has also suggested that a portion of the company’s Bitcoin stash may be used to acquire new income-generating businesses, such as a digital bank [1]. The broader corporate appetite for Bitcoin in Japan appears to remain strong, despite the recent bearish price trend in the cryptocurrency market.

Source:

[1] Metaplanet Added to FTSE Japan and All-World Stock Indices (https://cointelegraph.com/news/metaplanet-added-ftse-japan-all-world-stock-indices)

[2] Japanese Firms Add 156.79 BTC as Bitcoin Drags (https://finance.yahoo.com/news/japanese-firms-add-156-79-145338644.html)

[3] Metaplanet’s Bitcoin Strategy Faces Fundraising Crunch as Stock Sinks (https://cointelegraph.com/news/metaplanet-bitcoin-fundraising-flywheel-breaks)