Metaplanet Inc., a Japanese crypto treasury firm, saw its shares plummet 8% in Tokyo trading following the announcement of its international share offering. The company priced its offering at ¥553 per share, representing a 10% discount from Tuesday's closing price.

Offering Details

The international share offering is set to raise ¥204.1 billion ($1.4 billion), with the majority of the funds earmarked for Bitcoin purchases. Morgan Stanley and Cantor Fitzgerald are serving as bookrunners for the deal.

Strategic Investment

In a notable development, US-based Bitcoin stockpiler Nakamoto Holdings has committed to purchasing up to $30 million of the offering, signaling continued interest in Metaplanet's Bitcoin-focused strategy.

Stock Performance

Metaplanet's stock has experienced significant volatility:

• Declined over 30% since announcing the overseas sale in August
• Dropped more than 60% from its June peak
• Despite recent declines, the stock is still up over 400% year-to-date

Bitcoin Holdings and Funding Strategy

Metaplanet currently holds 20,136 Bitcoin in its treasury. The company has primarily relied on stock acquisition rights as its funding mechanism for Bitcoin purchases. However, this strategy has lost momentum amid the recent share price decline.

Market Impact

The discounted share offering and subsequent stock price drop highlight the challenges faced by crypto-focused companies in the current market environment. While Metaplanet's year-to-date performance remains strong, the recent volatility underscores the risks associated with Bitcoin-centric business models and their impact on investor sentiment.

As the crypto market continues to evolve, investors will be closely watching how companies like Metaplanet navigate the balance between ambitious Bitcoin acquisition strategies and maintaining shareholder value.

Metaplanet Inc., under the leadership of President Simon Gerovich, has announced ambitious plans to raise $884 million through overseas share sales. This move comes as the company faces challenges in its Bitcoin acquisition strategy due to a significant decline in its stock price.

Stock Performance and Bitcoin Strategy

The company's stock has experienced a sharp 54% decline since mid-June, which has had a notable impact on its Bitcoin acquisition plans. Metaplanet's innovative 'flywheel' funding mechanism, which relies on moving strike warrants in collaboration with Evo Fund, has become less effective in the current market conditions.

Despite the stock's poor performance, Bitcoin has seen a modest 2% increase. This divergence has put pressure on Metaplanet's strategy, as the company aims to significantly increase its Bitcoin holdings.

Current Bitcoin Holdings and Future Goals

Metaplanet currently holds 18,991 Bitcoin tokens, valued at approximately $2.1 billion. The company has set an ambitious target to increase its Bitcoin holdings to 100,000 by the end of next year. However, the recent stock price decline has made this goal more challenging to achieve.

Market Valuation and Premium Compression

The company's market value premium over its Bitcoin holdings has seen a significant compression:

This compression indicates a shift in investor perception and valuation of the company relative to its cryptocurrency assets.

Proposed Funding Solution

To address these challenges and fund its Bitcoin acquisition strategy, Metaplanet is proposing the following measures:

1. Authorization of up to 555 million preferred shares
2. Potential to raise up to $3.8 billion
3. Maximum dividend rate of 6% on preferred shares

Shareholders will be asked to vote on this proposal, which could provide the company with significant capital for its operations and Bitcoin purchases.

Strategic Moves and Shareholder Meeting

In preparation for the preferred share issuance, Metaplanet has taken several strategic steps:

1. Suspended Evo's stock acquisition rights from September 3-30
2. Cleared the path for preferred share issuance

Additionally, Eric Trump, who has been granted 3.3 million shares via stock acquisition rights, plans to attend the upcoming shareholder meeting.

As Metaplanet Inc. navigates these financial challenges and pursues its cryptocurrency strategy, investors and market observers will be closely watching the outcome of the shareholder vote and the company's ability to execute its ambitious Bitcoin acquisition plans in the face of stock market headwinds.