Metaplanet keeps buying BTC, but shareholders are paying for it

[kaankaya]

I was looking at the latest Metaplanet update, and the dilution part is getting harder to ignore.

The company has been issuing more shares to raise money and buy BTC. Nothing unusual there for a Bitcoin treasury company. But Metaplanet also had an executive stock-rights pool tied to 20% of fully diluted shares.

So when the share count went up, that executive pool went up too. Existing shareholders were getting diluted, while the possible reward for management was getting bigger at the same time.

In August, Metaplanet froze the pool at about 319.5M shares and added a five-year lockup. But it wasn't reduced back to where it was before all those new shares were issued.

That's the part I find difficult with BTC treasury stocks. A company can keep saying "we bought more Bitcoin", but shareholders still need to ask how much BTC they effectively own per share.

Metaplanet stock is down around 43% this year.

At what point does dilution cancel out the benefit of buying more BTC? And would you rather own Metaplanet shares or just hold Bitcoin directly?

[_act_]

At what point does dilution cancel out the benefit of buying more BTC? And would you rather own Metaplanet shares or just hold Bitcoin directly?

It is better you get something clear, Metaplanet shares is not like the IBIT or any other bitcoin ETF, it is a stock belonging to Metaplanet and which is not pegged to the price of bitcoin. But some bitcoin users can buy the shares if they see Metaplanet friendliness to bitcoin. I do not know much about Metaplanet share, but I will prefer to just go for bitcoin.

[louis2608]

I was looking at the latest Metaplanet update, and the dilution part is getting harder to ignore.

The company has been issuing more shares to raise money and buy BTC. Nothing unusual there for a Bitcoin treasury company. But Metaplanet also had an executive stock-rights pool tied to 20% of fully diluted shares.

So when the share count went up, that executive pool went up too. Existing shareholders were getting diluted, while the possible reward for management was getting bigger at the same time.

In August, Metaplanet froze the pool at about 319.5M shares and added a five-year lockup. But it wasn't reduced back to where it was before all those new shares were issued.

That's the part I find difficult with BTC treasury stocks. A company can keep saying "we bought more Bitcoin", but shareholders still need to ask how much BTC they effectively own per share.

Metaplanet stock is down around 43% this year.

At what point does dilution cancel out the benefit of buying more BTC? And would you rather own Metaplanet shares or just hold Bitcoin directly?

This is exactly the dark side of the MicroStrategy playbook that people ignore. Everyone blindly cheers when a company announces they’re buying more BTC, but if they’re relentlessly diluting your equity to do it—and inflating executive compensation pools at the same time—retail is basically just funding their bonuses.

With the stock down 43%, the math speaks for itself. The dilution has already canceled out the benefit.

[Aanuoluwatofunmi]

At what point does dilution cancel out the benefit of buying more BTC? And would you rather own Metaplanet shares or just hold Bitcoin directly?

Metaplanets are bitcoin investors and their not like other financial advisory that are investing on stocks, their major purpose is directly on bitcoin investment and this does not has anything to do with other traditional assets.

But to still be on a safer side, I would rather prefer investing on bitcoin on my own than to depend on institution like metaplanets to invest bitcoin for me and spread the profit.

[Call_Me_Guru]

I think the concern is genuine, although I wouldn’t say dilution as applied here automatically cancels out the BTC accumulation. What matters is whether the additional capital being raised results in more BTC per share over time. If it does, the dilution may actually be justified and the strategy can still be productive for shareholders. But if the share count grows faster than the BTC exposure per share, that’s where things start getting uncomfortable and calls for concerns.

The executive rights pool is another point of discussion, especially when existing shareholders are already being diluted. So I think looking at the total BTC alone doesn’t tell the whole fact, the BTC per share is is more accurate for me. And if that measure starts going the wrong way, the argument for simply holding Bitcoin becomes much stronger. That’s probably the real concern behind the lamentation. Isn't it?

[Barcode_]

Metaplanet are just another stock listed company doing the same exactly as Microstrategy are doing, these stock companies are willing to issue more shares to sell to shareholders so they could have more funds to purchase bitcoin. But in my opinion, I think the shareholders are actually taking a big risk to buy shares of these companies instead of buying bitcoin directly by themselves and holding the bitcoin in their own bitcoin wallet. There are chances when these companies starts to accumulate debts, they might be forced to sell away some of their bitcoins lower than the prices they initially bought and shareholders of these companies would not even have the rights to prevent the owner of the company selling away their bitcoins at huge losses.

[Don Pedro Dinero]

This is exactly the dark side of the MicroStrategy playbook that people ignore. Everyone blindly cheers when a company announces they’re buying more BTC, but if they’re relentlessly diluting your equity to do it—and inflating executive compensation pools at the same time—retail is basically just funding their bonuses.

With the stock down 43%, the math speaks for itself. The dilution has already canceled out the benefit.

That's right—it's a strategy that Michael Saylor started and then sold, which made a whole bunch of other companies popular that are now on the decline. The biggest ones are holding on, but the smaller ones have either abandoned the model or gone bankrupt. Even a damn coffee shop in my country tried to adopt the model, and now it's in trouble.

Vanadi Coffee Takes a Hit from Bitcoin: Losses Double and Its Stock Plummets 99%

Vanadi Coffee will not meet its financial goals and is purchasing only a tiny fraction of the bitcoins it promised

The sources are in Spanish, but I've translated the titles so they're easy to understand. If you're Michael Saylor or one of the big corporations, you don't usually have much trouble continuing to finance yourself by selling more and more shares of your company—diluting your shareholders—but if you're just some damn coffee chain, you do have problems. There have been many such cases.

[Franklyn-wood]

Metaplanet are just another stock listed company doing the same exactly as Microstrategy are doing, these stock companies are willing to issue more shares to sell to shareholders so they could have more funds to purchase bitcoin. But in my opinion, I think the shareholders are actually taking a big risk to buy shares of these companies instead of buying bitcoin directly by themselves and holding the bitcoin in their own bitcoin wallet. There are chances when these companies starts to accumulate debts, they might be forced to sell away some of their bitcoins lower than the prices they initially bought and shareholders of these companies would not even have the rights to prevent the owner of the company selling away their bitcoins at huge losses.

Yes you are right on point the share holders in this companies are taking big risk by buying Bitcoin shares from this company rather than buying Bitcoin directly into their own personal wallet which is safer.
A man once told me that he rather buy Bitcoin through share from any company he wants rather than buying Bitcoin directly
into there own wallets, because they feel this companies are registered, licensed and do have insurance in case we of losses.

[X-ray]

This is exactly the dark side of the MicroStrategy playbook that people ignore. Everyone blindly cheers when a company announces they’re buying more BTC, but if they’re relentlessly diluting your equity to do it—and inflating executive compensation pools at the same time—retail is basically just funding their bonuses.

With the stock down 43%, the math speaks for itself. The dilution has already canceled out the benefit.

The problem is, it isn't exactly MicroStrategy playbook, it has no clause that say 20% of fully diluted share iirc for MicroStrategy and Metaplanet is going with the playbook and modify it.

If Metaplanet was a US based company and do the same thing, they'd be called out for it instantly.

Even without that ridiculous clause, MicroStrategy is already being called out as a ponzi. Even if MSTR got diluted the same.