based on materials from the site - By Coinpaper.com
With 18,991 BTC in assets, the company aims to reach 100,000 BTC by 2026, but is now turning to overseas stock placements and the issuance of preferred shares to raise capital. Analysts warn that the decline in the 'Bitcoin premium' from 8x to 2x increases dilution risks, although recent upgrades of Metaplanet to the FTSE Japan mid-cap index have a certain positive effect.
Metaplanet, a company whose shares are listed on the Tokyo Stock Exchange and known for its aggressive accumulation of bitcoins, is facing financial difficulties amid the ongoing decline in its stock price. Since mid-June, the company's shares have fallen by more than 50%, while Bitcoin has risen by about 2% over the same period.
The sharp decline has undermined Metaplanet's capital-raising strategy, which was based on rising stock prices to secure funding through MS warrants issued for Evo Fund, the company's key investor. In the current stock price decline, exercising these warrants has become unprofitable for Evo, leading to a reduction in Metaplanet's liquidity and a slowdown in its bitcoin acquisition campaign.
Metaplanet is led by former Goldman Sachs trader Simon Gerovich. The company has accumulated 18,991 BTC, making it the seventh-largest public holder of bitcoins, according to BitcoinTreasuries.NET. The company has also set ambitious goals to hold 100,000 BTC by 2026 and 210,000 BTC by 2027. However, as the current strategy falters, Gerovich is seeking alternative sources of funding.
Last week, Metaplanet announced plans to raise about 130.3 billion yen (880 million USD) through a public offering of shares in overseas markets. Additionally, shareholders will vote to approve the issuance of up to 555 million preferred shares, which could raise up to 555 billion yen (3.7 billion USD). Gerovich described the preferred shares as a protective mechanism that offers capital without diluting the stakes of common stockholders in the event of further stock declines. The preferred shares are expected to yield up to 6% annual dividends and are initially limited to 25% of Metaplanet's assets in bitcoins, which may be attractive to Japanese investors seeking high returns.
Despite these efforts, analysts warn that the success of Metaplanet's strategy depends on the 'Bitcoin premium' — the difference between the company's market capitalization and the value of its assets in bitcoins. This premium has fallen from over 8x in June to just 2x, raising concerns about future dilution.
The company has already suspended the execution of Evo's orders for most of September to facilitate the issuance of preferred shares. It remains unclear whether this move will restore momentum to its funding model. Nevertheless, Metaplanet received an upgrade from small to mid-cap status in the September half-year review by FTSE Russell, ensuring inclusion in the FTSE Japan index after strong results in the second quarter.
