Metaplanet option pool sparks backlash; CEO pledges review

Metaplanet’s Series 10 executive option pool expanded from 46 million shares to 319.5 million, triggering shareholder objections over dilution. Investors have asked the company to cancel the additional shares created by the expansion and to publish clearer rules for future equity decisions.

The Series 10 pool was structured as 20% of fully diluted shares and automatically grew as the company issued new stock to fund its Bitcoin purchases. Metaplanet says it froze the pool at 319.5 million shares on Aug. 18. Critics say the automatic mechanism added roughly 273 million shares beyond the original allocation and magnified dilution for existing holders.

CEO Simon Gerovich pledged a review of governance and compensation policies and addressed his links to MMXX, saying he is a significant but non-majority shareholder in MMXX’s parent company and holds no executive role there. Gerovich also disclosed that he exercised 92,000 shares from the Series 10 pool on Aug. 31.

Supporters of the plan defended the size of the pool as a retention and incentive tool while the company pursues an aggressive Bitcoin accumulation strategy. Investor David Bailey wrote that giving the team 20% of the cap table over five years “isn’t some crazy number” and said his firm has been invested in Metaplanet “since day zero.”

Opponents focused on individual awards and the total size of the pool. A pseudonymous shareholder using the name Bitcoin Pharaoh claimed Bailey received 300,000 options at a 105 yen strike price when the stock traded near 510 yen. Bitcoin Pharaoh added that, by their calculation, the option pool effectively claimed about 26% of the company’s Bitcoin holdings.

Outside analysts proposed concrete steps to limit further dilution. Matthew Sigel, head of digital asset research at an asset manager, suggested freezing further exercise rights from Series 10, asking holders to voluntarily surrender excess rights, and considering options for shares already exercised. He also proposed replacing Series 10 with a shareholder-approved, five-year incentive plan tied primarily to Bitcoin per fully diluted share.

Metaplanet acknowledged in an Aug. 18 notice that expanding the pool “amplifies the dilution borne by existing shareholders.” The stock closed higher in Tokyo trading after a recent slide that trimmed a five-day decline of roughly 16%. The company has continued to add Bitcoin, including a purchase of 2,823 BTC, bringing total holdings above 43,000 BTC.

Shareholders are awaiting the outcome of Metaplanet’s governance review and any concrete proposals. Suggestions under discussion include canceling the newly created shares, freezing further exercises from the Series 10 pool, voluntary surrender of excess rights, and adopting a shareholder-approved incentive plan tied to Bitcoin per share. Metaplanet has not announced a timetable for policy changes.