Bitcoin Proxy’s Chief Seeks Funding Fix As ‘Flywheel’ Falters

Simon Gerovich, who turned a struggling Japanese hotelier into a Bitcoin stockpiler and investor darling, is feeling the heat. 

His company, Metaplanet Inc., has seen its stock halve in value since mid-June after soaring over 400% since the start of 2025. The swoon has jeopardized an unusual financing arrangement the firm previously relied on to generate capital for accumulating Bitcoin. 

That’s got the Metaplanet president rushing to find a fix.

On Wednesday, the company announced plans to raise $884 million selling shares overseas in an underwritten offering, with an option to boost the size. Shareholders are set to vote tomorrow on a proposal to allow Metaplanet to issue preferred stock — a rarity in Japan — to secure even more funding. 

Time is of the essence, Gerovich says. Bitcoin hit a record earlier this month on tailwinds from US President Donald Trump’s crypto policies, and a growing number of entities worldwide are jostling to accumulate the token, following the model of Michael Saylor’s Strategy Inc.

“We don’t want to fall behind — people are racing to buy Bitcoin,” Gerovich, a former Goldman Sachs Group Inc. derivatives trader, said in an interview. “I want another tool in my toolkit.”

Read: Michael Saylor Hit by Market Revolt as His Bitcoin Premium Sinks

There are now over 170 so-called Bitcoin treasuries — public companies with the token on their balance sheets — worldwide, with combined holdings worth over $111 billion, according to BitcoinTreasuries.net. Strategy ranks first with around 630,000 Bitcoin, while Metaplanet is in seventh place with 18,991 tokens, worth about $2.1 billion. 

The Japanese company aims to more than quadruple its stash to 100,000 Bitcoin by the end of next year, then roughly double it again in 2027. 

Metaplanet has raised over $1.6 billion so far this year to fund its buying spree via a stock acquisition rights agreement with Evo Fund, a boutique investment firm that’s part of US-headquartered Evolution Financial Group.

The arrangement involves Metaplanet selling equity to Evo via moving strike warrants, which grant holders the right to acquire shares at an initially agreed-upon price that changes over time based on the underlying stock. 

The ‘Flywheel’ Slows

Gerovich calls this funding strategy the “flywheel,” using a term common among crypto hoarders. 

It works well when the stock is rising — if shares rise above the pre-determined price, Evo Fund can exercise its rights at a profit. Metaplanet pays Evo “almost zero” in administrative and legal fees for the transactions, according to Gerovich. 

Evo declined to comment on the arrangement. 

But Metaplanet’s recent stock slump — its shares are down 54% through Aug. 29 from a June 16 high, even as Bitcoin rose 2% — has made it less compelling for Evo to exercise its warrants, according to Mark Chadwick, a former Jefferies analyst who now publishes Japan equity research on SmartKarma. 

“The flywheel has slowed,” Chadwick said. 

Metaplanet’s Bitcoin holdings ballooned more than 160% in the two months through June 30, but have grown by less than 50% since, according to data published on its website.

As the company’s shares fall, each Evo exercise generates less capital to buy Bitcoin, Chadwick said.

Metaplanet’s market value is now roughly double that of its Bitcoin holdings. In June, that “Bitcoin premium” stood at more than eight times. The premium is a closely-watched metric for Bitcoin treasury investors, because the closer a company’s value gets to that of its tokens, the more it risks diluting shareholders’ Bitcoin exposure by issuing equity.

“The Bitcoin premium is what drives the success of the entire strategy,” said Natixis analyst Eric Benoist. “If the premium compresses, then they can’t accumulate on the same advantageous terms, the interest decreases, and the stock goes down.”

Strategy recently eased its stock-sale limits in a bid to accelerate Bitcoin buying. For Metaplanet, the proposed solution is to branch out from moving strike warrants into preferred shares — along with tapping overseas equity investors. 

The Japanese company announced Wednesday that it has suspended all exercises of Evo’s stock acquisition rights between Sept. 3 and Sept. 30. The suspension “clears the path for subsequent preferred share issuance,” analyst Chadwick wrote in a note. 

Preferred shares are securities that combine features of both equity and debt. They don’t typically carry voting rights, but offer preferential access to dividends over common shares. Strategy has leaned heavily on them in the US. 

Gerovich views preferred shares as a “defensive mechanism” that would allow Metaplanet to raise capital without diluting common shareholders. “If our stock continues to fall, theoretically, to the value of our Bitcoin, we don’t really want to be selling equity,” he said. 

Under Metaplanet’s proposal, which shareholders will vote on at an extraordinary general meeting in Tokyo on Sept. 1, the firm aims to authorize up to 555 million preferred shares for potential issuance. If approved, the plan could raise up to ¥555 billion ($3.8 billion), according to company disclosures.

Eric Trump, son of the US President and an adviser to Metaplanet, plans to attend the gathering. He’s been granted 3.3 million of the company’s shares via stock acquisition rights, according to a statement.

Metaplanet’s preferred shares would pay a maximum 6% dividend, and their issuance will initially be capped at 25% of the value of the firm’s Bitcoin holdings. The securities’ hefty payout could make them attractive to investors in a nation where interest rates have hovered near zero for decades, said Natixis’s Benoist. 

Even so, “there isn’t infinite capital available,” Benoist said. “So I think everyone needs to ask themselves, when does this end?”