Metaplanet, Japan’s largest corporate Bitcoin owner, stands out as the company with 40,177 Bitcoins on its balance sheet and the third largest Bitcoin treasury in the world. The company, which has attracted attention recently, announced last November that it wanted to list Mars and Mercury, a new two-stage preferred stock class, on the stock exchange. However, the company announced that there will be a significant delay in this regard.
The plan, which will be the first in the Japanese market, has been postponed
Simon Gerovich, CEO of Metaplanet, stated that the fact that Japan’s preferred stock market is still underdeveloped makes the process seriously difficult. The preferred share that the company aims to offer will be only the seventh such share to be listed on the stock exchange in the country, as well as the first to have a preferred share listed with an “indefinite” feature in Japan. Designing this innovative structure in compliance with current regulations creates extra complexity.
In the statement in November, when Metaplanet announced new preferred shares, it was also stated that the company named Strategy had previously taken a similar step, and among these, Stretch (STRC) stood out among investors. Thus, the company aimed to create a new alternative in the market.
Legal and Financial Barriers
The first of the two biggest hurdles in the company’s plan is that Japanese stock market rules require preferred dividends to be backed by sustainable and recurring cash flows. Although Metaplanet has a remarkable operating history for six quarters so far, it needs to prove that its Bitcoin revenue model is stable and sustainable under different market conditions. This situation poses an additional challenge for a company that adopts a highly volatile asset such as Bitcoin as its business model.
The second obstacle is that Metaplanet, unlike traditional Japanese companies, aims to pay dividends to investors every month. However, in Japan, dividend payments are generally made once or twice a year. Therefore, the company has to build a completely new payment infrastructure around dividend payment dates. It appears that the process is more complex than anticipated in this respect.
Financial Results and Revenue Model
Metaplanet’s latest financial results revealed the growth of the company’s Bitcoin-based business model. Net sales increased 251 percent year over year, reaching $19.5 million (3.08 billion yen). Operating income was recorded at 14.4 million dollars (2.27 billion yen) and an annual growth of 283 percent was achieved. The company’s Bitcoin return since the beginning of the year was announced as 2.8 percent on a quarterly basis.
However, company shares have lost 25 percent of their value since the beginning of the year. Investors are cautious about whether innovative financial products will be accepted in the market and whether Metaplanet will be able to deliver sustainable and consistent performance thanks to its Bitcoin revenue model.
CEO Simon Gerovich emphasized that Japan still has a largely low-return capital market, so the introduction of preferred stock would be an important step. He also stated that the company remains determined to deliver the planned product to investors.
While Metaplanet is taking innovative steps in the financial world with its Bitcoin-based income model, it is considered that it may also trigger changes in existing regulations and market practices in Japan.
