Metaplanet CEO addresses shareholder concerns over dilution, but investors aren’t satisfied

When the CEO of a Bitcoin treasury company finally speaks up about governance concerns, you’d expect the stock to stabilize. Metaplanet’s shares had a different idea, falling roughly 7.5% to close at 271 yen on September 7, the trading session after CEO Simon Gerovich posted his response to shareholder criticism.

The Tokyo-listed firm, which adopted a Bitcoin-centric treasury strategy in 2024, is facing pointed questions about an executive stock option pool that ballooned nearly sevenfold. Gerovich’s attempt to reassure investors appears to have had the opposite effect.

The option pool problem

At the center of the controversy is Metaplanet’s Series 10 executive option pool. Originally sized at approximately 46 million shares, the pool swelled to 319.46 million shares thanks to a floating allocation formula tied to the company’s fully diluted share count.

On August 18, the company moved to cap the pool at 319.46 million shares, freezing it at its already-expanded size. A five-year lock-up was also instituted, meaning those options can’t be touched until August 17, 2031.

Just ten days after the cap was announced, Gerovich exercised 92,000 units on August 28, converting them into 64,032,000 common shares. That brought his total holdings to 79,587,500 shares.

Gerovich’s response and the MMXX question

On September 6, Gerovich took to X to address the growing chorus of shareholder discontent. He acknowledged that the company needed to communicate more effectively on governance matters and outlined plans for future remuneration policy transparency.

He also clarified his relationship with MMXX Ventures Limited, a firm established in 2022 that holds approximately 42,474,750 shares of Metaplanet, representing about 3.26% of the company. Gerovich stated that while he has an association with MMXX Ventures, he does not hold any operational role there.

The broader Bitcoin treasury dilemma

Metaplanet’s governance turbulence isn’t happening in a vacuum. The company is one of several publicly traded firms that have tied their corporate identity to Bitcoin holdings, following the playbook popularized by MicroStrategy’s Michael Saylor. The basic pitch: hold Bitcoin on the balance sheet, use equity markets to fund purchases, and let the company’s stock serve as a leveraged proxy for Bitcoin exposure.

Repeated equity issuances to fund Bitcoin purchases dilute existing shareholders. Executive option pools that expand automatically with each issuance compound that dilution.

The floating mechanism that allowed the Series 10 pool to expand from 46 million to 319.46 million shares was embedded in the option structure since 2023. That it was only capped in August 2026, after it had already grown nearly seven times over, raises fair questions about whether the board’s oversight kept pace with the strategy’s execution.

Capping the pool and imposing a five-year lock-up are concrete steps. But they also crystallize a new reality: 319.46 million shares are now earmarked for executive compensation, locked until 2031.

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