Bitcoin News Today: Metaplanet Gambles on Preferred Shares to Salvage Bitcoin Funding Flywheel

Metaplanet shareholders are set to vote on a $884 million capital-raising plan as the company navigates a fundraising crunch following a steep decline in its stock price. The Japanese firm, known for its aggressive Bitcoin accumulation strategy, has seen its shares drop 54% since mid-June, despite a modest 2% gain in Bitcoin's price during the same period. This sharp decline has disrupted the company’s capital-raising “flywheel” mechanism, which relies on rising share prices to generate liquidity through warrant exercises with its key investor, Evo Fund. The drop in share price has made it less attractive for Evo to exercise these warrants, thereby constraining Metaplanet’s ability to fund its Bitcoin acquisition strategy [1].

To address the liquidity challenge, Metaplanet has announced plans to raise approximately 130.3 billion yen ($884 million) through a public share offering in overseas markets. Additionally, shareholders will vote on a proposal to issue up to 555 million preferred shares, which could raise as much as 555 billion yen ($3.7 billion). The preferred shares, described by Metaplanet’s CEO Simon Gerovich as a “defensive mechanism,” would allow the firm to secure capital without diluting common shareholders. These shares are expected to offer up to 6% annual dividends and are initially capped at 25% of the firm’s Bitcoin holdings. This structure could appeal to Japanese investors, who are seeking yield in a low-interest-rate environment [1].

The company has continued to acquire Bitcoin as part of its long-term strategy. On September 1, Metaplanet purchased an additional 1,009 Bitcoin at an average price of 16.3 million yen per BTC, bringing its total holdings to 20,000 Bitcoin. This accumulation strategy is part of a broader goal to reach 100,000 BTC by the end of 2026 and 210,000 BTC by 2027. The firm’s Bitcoin yield, which measures the percentage change in the ratio of total Bitcoin holdings to fully diluted shares, reached 30.7% from July 1 to September 1, 2025, reflecting continued growth in its Bitcoin-backed value proposition [2].

However, analysts have raised concerns about the sustainability of Metaplanet’s strategy. The firm’s Bitcoin premium—the difference between its market capitalization and the value of its Bitcoin holdings—has fallen from over 8x in June to just 2x, increasing the risk of dilution. Eric Benoit of Natixis highlighted that the Bitcoin premium is a key determinant of the success of Metaplanet’s overall capital-raising and Bitcoin accumulation strategy. The decline in the premium raises questions about the company’s ability to attract further investment and maintain its pace of Bitcoin purchases [1].

Despite these challenges, Metaplanet has reported strong financial performance in recent quarters. Its Q2 earnings showed a 41% quarter-on-quarter increase, with a profit of 11.1 billion yen ($75.1 million). The firm also expects full-year revenue of 3.4 billion yen ($23.1 million) and operating profit of 2.5 billion yen ($17 million), driven by recurring cash-secured-put premiums and operational performance. CEO Simon Gerovich noted that the Bitcoin income generation business has grown for three consecutive quarters, providing financial resilience and flexibility for future financing efforts. The firm has also been upgraded from a small-cap to a mid-cap stock in the FTSE Japan Index, reflecting its improved market standing [1].

As the company prepares for its shareholder vote and alternative fundraising initiatives, the effectiveness of its capital-raising mechanisms will be closely watched. The preferred shares and overseas share offering represent a strategic shift aimed at stabilizing its liquidity while continuing to grow its Bitcoin treasury. The success of these efforts will depend on investor confidence, market conditions, and the continued execution of Metaplanet’s Bitcoin accumulation strategy.

Source:

[1] Metaplanet plans to raise additional $3.7B to buy Bitcoin (https://cointelegraph.com/news/metaplanet-bitcoin-fundraising-flywheel-breaks)

[2] Metaplanet has bought another 1009 Bitcoin worth around ... (https://www.mitrade.com/insights/news/live-news/article-3-1084435-20250901)