Daijiworld Media Network - Tokyo

Tokyo, Aug 31: Simon Gerovich, president of Metaplanet Inc, the Japanese firm that transformed from a struggling hotelier into one of the world’s biggest corporate Bitcoin holders, is facing turbulence as the company’s shares tumble.

After soaring more than 400 percent earlier this year, Metaplanet’s stock has now halved in value since mid-June, threatening its unusual financing model that had fueled its rapid Bitcoin accumulation.

In a bid to shore up capital, the Tokyo-based company on Wednesday announced plans to raise $884 million by selling shares overseas, with an option to expand the offer. Shareholders will vote on September 1 on a proposal allowing the firm to issue up to 555 million preferred shares, a rarity in Japan, potentially unlocking as much as ¥555 billion ($3.8 billion).

“We don’t want to fall behind – people are racing to buy Bitcoin,” Gerovich, a former Goldman Sachs derivatives trader, told media. “I want another tool in my toolkit.”

Backed by US President Donald Trump’s pro-crypto stance, Bitcoin touched record highs earlier this month, sparking a global rush among companies to build treasuries of the token. According to Bitcoin Treasuries.net, more than 170 firms now hold Bitcoin worth over $111 billion collectively. US-based Strategy Inc., led by Michael Saylor, tops the list with 630,000 Bitcoins, while Metaplanet ranks seventh with nearly 19,000 tokens valued at $2.1 billion.

Gerovich has set an ambitious target: 100,000 Bitcoins by end-2026 and nearly doubling that again by 2027. Metaplanet has already raised $1.6 billion this year, largely through a unique “flywheel” arrangement with Evo Fund, part of the Evolution Financial Group. The system allowed Evo to buy equity at moving strike prices, giving Metaplanet steady cash to fuel its buying spree.

But with shares down 54 percent since June 16, the mechanism has weakened. Analysts warn that the so-called “Bitcoin premium”—Metaplanet’s market value versus the value of its token holdings—has shrunk sharply. In June, the firm was valued at over eight times its Bitcoin assets; now, the gap is just double.

“The Bitcoin premium is what drives the success of the entire strategy. If the premium compresses, the advantage erodes,” explained Eric Benoist of Natixis.

To counter this, Metaplanet has suspended Evo’s acquisition rights for September and is turning to preferred shares as a “defensive mechanism.” These securities, offering dividends of up to 6 percent without voting rights, could attract investors in Japan’s near-zero interest rate environment, analysts said.

Adding further spotlight, Eric Trump, son of the US President and an adviser to Metaplanet, is scheduled to attend the upcoming Tokyo shareholder meeting. He has already been granted 3.3 million shares through acquisition rights.

Still, concerns remain. “There isn’t infinite capital available,” Benoist cautioned. “Everyone needs to ask, when does this end?”