Metaplanet cuts 10th round of share dilution by 41% after investor concerns

Metaplanet cuts potential shares in Series 10 stock options by 41.1% and implements new exercise limits until 2031.

Metaplanet has reduced the number of potential shares associated with its Series 10 stock options by 41.1%, reducing its share pool from 319.46 million shares to 188.19 million shares, and set new exercise limits that are valid until 2031.

Core Summary

Metaplanet cut the number of potential shares under the Series 10 stock option by 41.1% from 319.46 million shares to 188.19 million shares. After deducting previously exercised shares, the remaining potential shares will fall 55.5% to 105.37 million shares, while fully diluted Bitcoin holdings per share are expected to increase by approximately 8.8%. Unvested rights will be gradually implemented in three stages between 2029 and 2031, and the original lock-up period until August 2031 will remain unchanged. In addition, the company canceled plans to transfer 20% of unexercised rights to the employee incentive pool and will develop a new compensation plan.

Board of Directors approves amendments to terms in response to shareholder concerns

Metaplanet disclosed to the Tokyo Stock Exchange on September 11 that its board of directors approved another amendment to Series 10 rights, adjusting the number of underlying shares corresponding to each right from 696 shares to 410 shares. After considering exercised rights, the remaining potential shares will fall 55.5% from 236.64 million shares to 105.37 million shares.

"In the past few weeks, many shareholders have raised questions about Metaplanet's compensation structure, governance mechanisms and our decision to transform a troubled Japanese hotel business in less than two years," the company wrote in a letter to shareholders. CEO Simon Gerovich said the series of adjustments were aimed at optimizing the corporate governance structure.

This amendment uses the number of shares as at September 1, 2025 as the reference benchmark to replace the June 30, 2026 benchmark used when the amendment was announced last month. Metaplane pointed out that the new calculation is based on the number of shares outstanding at an earlier date, corresponding to a post-exercise dilution rate of 20%. The decision follows shareholder questions about the size and structure of the Series 10 incentive plan. Earlier reports showed that Metaplanet fixed its options pool at 319.46 million potential shares on Aug. 18, when the company removed a mechanism that automatically increased the number of shares as the number of fully diluted shares expanded.

Reassessing Dilution Effects and Financial Impact

Metaplanet stated that the company reconsidered the reference period after receiving feedback from shareholders and capital market participants. The Board reviewed the Company's previous equity financing using mNAV (multiple of market net asset value), BTC yield and shareholder value generated by the transaction. According to the company, financing before mid-2025 was completed at mNAV levels several times the net asset value, making a significant contribution to fully diluted Bitcoin holdings per share.

In contrast, the September 2025 international placement and subsequent third-party rights issue were completed at a lower net asset value premium. While these transactions still increased fully diluted Bitcoin holdings per share, their contribution to BTC yields was smaller than earlier financing transactions. Gerovich described September 2025 as a turning point in capital raising from a "significant thickening" to a "moderate thickening", although the latter still has a thickening effect. In his letter to shareholders, he said resetting the ratio to 1:410 eliminated more than $220 million in the value of warrants.

Gerovich pointed out that this adjustment reduced the total number of fully diluted shares and increased fully diluted Bitcoin holdings per share by approximately 8.8%. Disclosure data showed that as of September 11, Metaplanet's effectively diluted shares outstanding were approximately 1.5 billion shares, compared with 1.63 billion shares at the end of June. Bitcoin holdings per effectively diluted share were 0.0286646, and the company's BTC yield for the quarter was 8.8%.

This calculation is based on the 43,000 bitcoins held by Metaplanet unchanged. The company increased its holdings of 2,823 bitcoins in the second quarter, with an average purchase price of 12.7 million yen per bitcoin, and an overall average acquisition price of approximately 15.3 million yen per bitcoin.

Unvested rights face new exercise restrictions

This amendment not only involves changes in the potential number of shares, but also changes the exercise arrangements for unvested Series 10 rights. Unvested rights will be divided into three equal parts, the first one will be exercisable on August 18, 2029, and the next two will be exercisable on August 18, 2030 and August 18, 2031 respectively. Rights vested on February 8, 2026 can still be exercised normally. Shares acquired through exercise (including issued shares) will continue to be subject to the lock-up period until August 17, 2031, and the exercise price will remain at 10 yen per share.

Two holders have exercised 119,000 rights at the old ratio (696 shares per unit) and obtained 82.824 million shares. Metaplanet said that because these exercises were legal under the terms in effect at the time, the relevant shares would not be returned or cancelled. The adjustment will reduce the number of shares that these holders can acquire in the future. According to the revised calculation, one director holds rights corresponding to 113.16 million shares, two senior executives correspond to 57.81 million shares, and two employees correspond to 17.22 million shares. After deducting the shares already acquired, the remaining exercisable shares are 105.37 million shares.

Gerovich previously exercised 92,000 Series 10 rights and obtained 64.03 million shares, bringing his direct shareholding to 79.59 million shares. The deal triggered shareholder review over the compensation structure. In the latest letter, Gerovich said he recused himself from board discussions and voting because of his Series 10 rights. Metaplanet's official filing shows that all rights holders agreed to the amendment before the board's resolution.

Cancel employee warrant pool plan

Metaplanet abandoned another part of its August plan to transfer up to 90,000 Series 10 rights (approximately 20% of the unexercised balance) into long-term executive and employee incentive tools. Gerovich said warrants previously earmarked for the pool will no longer be transferred. Metaplanet plans to design a separate compensation plan for new hires, with the advice of global compensation consultants.

The CEO said that as the business expands, the company intends to strengthen board supervision, compensation practices and shareholder communication. Metaplanet currently has 10 board members, 9 of whom are independent directors, which is the result of the appointment of five new directors at the 2025 and 2026 annual shareholders 'meetings.

The company's international expansion includes a deal with Nasdaq-listed Super League Enterprise pending. In August, Metaplane agreed to invest 2,100 bitcoins and $2.5 million in the company, a transaction structure that would give Metaplane a 95.7% stake and establish a U.S. Bitcoin treasury platform called Superplanet.

The Series 10 amendments came into effect on September 11 and registration is expected to be completed within two weeks. Metaplanet stated that the change is expected to have limited material impact on the consolidated financial results for the current fiscal year, and that the original August 17, 2031 lock-up period remains unchanged.