Metaplanet Slashes Series 10 Share Pool by 41% Amid Dilution Concerns

Metaplanet CEO Simon Gerovich said the Japanese Bitcoin (CRYPTO: $BTC) treasury company will cut the number of shares that could be issued under its Series 10 stock acquisition rights by 131.3 million, following criticism from shareholders over potential dilution.

The company said Friday that it will reduce the number of shares tied to each right from 696 to 410. That will bring the total number of potential shares down from 319.464 million to 188.19 million, a 41.1% reduction. The number of shares still available for future exercises will fall 55.5%, from 236.64 million to 105.366 million.

The exercise price will remain JPY 10 per share, while shares acquired through the rights will continue to face a lock-up until August 17, 2031. Shares that have already been issued will not be returned or canceled. Instead, the reduction will lower the number of shares holders can acquire through future exercises.

Gerovich said the change will eliminate more than $220 million in warrant value and lift Metaplanet's Bitcoin per fully diluted share by about 8.8%. The company's filing shows Bitcoin per effective diluted share rising to 0.0286646 BTC from 0.0263554 BTC at the end of June.

Metaplanet will also drop its plan to transfer up to 90,000 rights to a long-term officer and employee incentive vehicle. "With respect to equity-based compensation for the future recruitment of global talent, the Company will instead consider a new equity-based compensation plan incorporating the advice of a leading global compensation consultant," the company wrote.

Last month, Metaplanet denied selling $320 million worth of Bitcoin after the transfer of 5,014 BTC between its own custodial wallets, calling it a routine custody operation.

Metaplanet shares closed Friday down by 3.8%. The company's shares are down nearly 40% year-to-date.