Metaplanet's Strategic Preferred Share Issuance: A New Paradigm for Bitcoin Treasury Financing

In the evolving landscape of corporate Bitcoin treasuries, Metaplanet has emerged as a trailblazer, leveraging innovative capital structures to expand its digital asset holdings while mitigating dilution risks. The Japanese firm's 2025 issuance of two-tier preferred shares-Class A (MARS) and Class B (MERCURY)-represents a paradigm shift in how companies finance Bitcoin strategies, blending debt, equity, and derivative instruments to create a hybrid model that appeals to institutional investors and treasury managers alike.

Capital Structure Innovation: Dual-Tier Preferred Shares

Metaplanet's preferred share issuance in 2025 introduces a dual-tier structure designed to stabilize its balance sheet while aligning with Bitcoin's volatile price action. The senior Class A shares, dubbed MARS, offer monthly adjustable dividends that respond to market conditions, positioning them as a non-dilutive, senior instrument at the top of the equity stack according to reports. This structure provides a buffer against equity price swings, a critical feature for a company whose valuation is increasingly tied to its Bitcoin reserves.

Complementing this is the Class B perpetual preferred equity, MERCURY, which features a fixed 4.9% annual dividend on a 1,000 yen notional strike price, with quarterly payments and a long-dated conversion option into common shares according to reports. The conversion mechanism links returns to Bitcoin price movements, creating a hybrid instrument that offers both income stability and upside potential.

By pricing MERCURY at 900 yen per share and issuing 23.61 million units, Metaplanet raised approximately ¥21.25 billion ($150 million), funds allocated to Bitcoin purchases, debt repayment, and infrastructure development. This approach allows the firm to bolster its Bitcoin treasury without liquidating existing holdings, a stark contrast to traditional equity or debt financing.

Institutional Adoption: A Win-Win for Investors and Issuers

Institutional investors have shown strong appetite for Metaplanet's MERCURY shares, drawn by the predictable income stream and the embedded conversion option. The 4.9% yield, coupled with the potential to convert into common stock if Metaplanet's equity price rises, offers a compelling risk-rebalance in a market where Bitcoin's volatility often deters conventional capital deployment according to analysis. According to a report by CoinLaw, the issuance marked a strategic pivot for Metaplanet, enabling it to transition into a Bitcoin-centric business model while minimizing dilution for existing shareholders according to reports.

The institutional adoption of MERCURY also reflects broader market confidence in Bitcoin-backed capital structures. By securing ¥21.25 billion in gross proceeds, Metaplanet demonstrated that institutional investors are willing to allocate capital to hybrid instruments that hedge against Bitcoin's price swings while generating steady returns. This aligns with a growing trend of institutional players seeking exposure to Bitcoin through structured products rather than direct ownership, mitigating liquidity and custody risks according to analysis.

Implications for Bitcoin Treasury Financing

Metaplanet's hybrid financing model-combining Bitcoin-backed loans, preferred shares, and derivative strategies-has significant implications for corporate treasuries. The firm has drawn $100 million from a Bitcoin-backed credit agreement and accessed an additional $130 million from its $500 million credit facility, using the proceeds to fund Bitcoin purchases, share repurchases, and income-generating activities like options trading according to reports. These loans, secured by $2.7 billion in Bitcoin reserves, are structured with floating interest rates and daily renewals, offering flexibility in a volatile market according to reports.

The integration of perpetual preferred shares like MERCURY further enhances this model. By issuing non-dilutive equity with conversion features tied to Bitcoin's price, Metaplanet creates a capital structure that balances growth and stability. As noted in a report by CoinNews, this approach allows the firm to maintain a Bitcoin-heavy balance sheet even amid unrealized losses on its BTC holdings, a challenge faced by many corporate treasuries according to reports. The broader implication is that Bitcoin-backed credit and preferred equity can serve as substitutes for traditional equity issuance when valuations compress, offering a novel solution to capital-raising constraints according to reports.

Risks and Considerations

While Metaplanet's model is innovative, it is not without risks. The firm's reliance on Bitcoin collateral exposes it to collateral liquidation risks during sharp price declines, a vulnerability highlighted in a Cryptorank analysis according to reports. Additionally, the floating interest rates on its credit facilities mean rising borrowing costs could pressure profitability, particularly if Bitcoin's price stagnates or declines. Institutional investors in MERCURY shares also face the risk of limited upside if Metaplanet's common stock fails to appreciate sufficiently to trigger conversions according to analysis.

Conclusion

Metaplanet's preferred share issuance and Bitcoin-linked financing model exemplify the next phase of corporate treasury innovation. By designing instruments that align with Bitcoin's unique properties-volatility, scarcity, and store-of-value potential-the firm has created a capital structure that appeals to both risk-averse income seekers and growth-oriented investors. As more corporations explore Bitcoin treasuries, Metaplanet's approach offers a blueprint for balancing capital efficiency, shareholder returns, and digital asset growth. However, the success of this model will depend on Bitcoin's price trajectory and the firm's ability to navigate the inherent risks of a hybrid, crypto-anchored capital structure.