Address by Simon Gerovich
In a recent address on September 6, Simon Gerovich, the CEO of Metaplanet, confronted concerns regarding the company’s Series 10 executive option plan and disclosed connections to its substantial shareholder, MMXX Ventures. Gerovich clarified that he holds a ‘significant but non-majority’ stake in the parent company of MMXX, distancing himself from the operational decisions concerning its investments or trading activities. This commitment to transparency arises amid ongoing scrutiny by shareholders, who are invested in understanding the relationships and equity dynamics within the company.
Compensation Program Controversy
The backdrop for these discussions is the controversy surrounding Metaplanet’s compensation program, which has expanded as the firm continues to build its Bitcoin treasury. As of August 18, the Series 10 plan was capped at 319,464,000 potential shares amidst fears of dilution among existing investors. Critics argue that, while the amendment limits future share issuance, it fails to rectify growth already accrued in the past.
Shareholder Concerns and Actions
On August 28, Gerovich exercised his rights to acquire 92,000 shares, leading to the creation of 64,032,000 new shares and boosting his ownership to 79,587,500 shares, as detailed in the company’s August 31 filing. Although this exercise followed the new cap, the method used to calculate share provisions raised issues, as it gave rise to more shares than shareholders anticipated—an outcome the company did not initially foresee. Metaplanet’s board adopted the mechanism that kept the potential option pool approximately at 20% of the total diluted shares, inadvertently amplifying the dilution existing shareholders experienced.
Some shareholders, notably one using the pseudonym Bitcoin Pharaoh, believe that approximately 273 million shares of the potential options were created post-implementation of the Bitcoin strategy—a contention Metaplanet has yet to officially endorse or refute. Moreover, questions linger regarding the future of these patient rights as some shareholders propose implementing performance-based incentives instead of the current structure.
Commitment to Transparency
Gerovich acknowledged that past communications regarding these matters fell short of the clarity needed. In his efforts to bridge that gap, he pledged to enhance disclosures concerning corporate decisions and structures moving forward. However, he refrained from committing to revealing MMXX’s entire ownership structure or reconsidering the previously agreed-upon rights allocation.
Market Response and Future Outlook
Amid these developments, Metaplanet’s share prices have fluctuated, recently trading at around ¥255, a significant decline reflecting mounting concerns about dilution and Bitcoin market valuations. The response from shareholders suggests a need for the company to provide concrete explanations and reassess its governance and financial strategies, particularly as Metaplanet expands its Bitcoin assets.
Looking ahead, the next vesting date for Series 10 rights is set for February 8, 2027, raising the stakes for both the company and its investors as they await clarity on how ownership structures will evolve and impact Metaplanet’s value proposition.
