Metaplanet, a prominent Tokyo-listed firm known for its strategic accumulation of Bitcoin, is currently navigating significant challenges as its share price experiences a steep decline. This downturn poses a threat to the company’s innovative fundraising model, which has been instrumental in building one of the world’s largest corporate Bitcoin treasuries.
Since mid-June, Metaplanet’s stock has plummeted by 54%, a stark contrast to Bitcoin’s (BTC) modest gain of approximately 2% over the same period. This decline has placed considerable strain on the company’s capital-raising “flywheel,” a mechanism that relies on rising share prices to unlock funding through MS warrants issued to Evo Fund, its primary investor.
According to a recent report by Bloomberg, the sharp drop in share prices has made it less attractive for Evo to exercise these warrants, thereby squeezing Metaplanet’s liquidity and hindering its aggressive Bitcoin acquisition strategy.
Under the leadership of former Goldman Sachs trader Simon Gerovich, Metaplanet currently holds 18,991 BTC, positioning it as the seventh-largest public holder, as per BitcoinTreasuries.NET. The firm ambitiously aims to expand its Bitcoin holdings to 100,000 BTC by the end of 2026 and 210,000 BTC by 2027.
Metaplanet Turns to Overseas Markets
With the “flywheel” strategy losing its effectiveness, Gerovich is exploring alternative fundraising avenues. On Wednesday, Metaplanet announced its plans to raise approximately 130.3 billion yen ($880 million) through a public share offering in overseas markets.
Moreover, shareholders are set to vote on Monday regarding the approval of issuing up to 555 million preferred shares, a relatively rare financial instrument in Japan, which could potentially raise up to 555 billion yen ($3.7 billion).
In an interview with Bloomberg, Gerovich described the preferred shares as a “defensive mechanism” that enables capital infusion without diluting common shareholders, even if the stock price declines further. These shares, which are expected to offer up to 6% annual dividends and initially capped at 25% of the firm’s Bitcoin holdings, may attract Japanese investors seeking yield.
Falling Bitcoin Premium Puts Metaplanet’s Strategy at Risk
However, analysts remain cautious. Eric Benoit of Natixis commented, “The Bitcoin premium is what will determine the success of the entire strategy.” This premium, which is the difference between Metaplanet’s market cap and the value of its Bitcoin holdings, has decreased from over 8x in June to just 2x, increasing the risk of dilution.
The company has suspended Evo’s warrant exercises from September 3 to 30, setting the stage for the preferred stock issuance. Whether this strategic shift will stabilize Metaplanet’s funding approach remains uncertain.
In the meantime, Metaplanet has been upgraded from a small-cap to a mid-cap stock in FTSE Russell’s September 2025 Semi-Annual Review, earning inclusion in the FTSE Japan Index. This development follows the company’s strong Q2 performance.
For further details, you can read the full article on Cointelegraph: Metaplanet’s Bitcoin Fundraising Flywheel Breaks.
