Metaplanet delays preferred share listing amid challenging Japanese market structure

Metaplanet (3350), Japan’s largest corporate bitcoin holder and the world’s third-largest bitcoin treasury company holding 40,177 BTC on its balance sheet, has confirmed a delay in its planned preferred share listing.

CEO Simon Gerovich discussed the complexity of navigating Japan’s underdeveloped preferred equity market as the primary reason for the hold-up.
The company’s planned instrument would be only the seventh listed preferred in Japan, Gerovich said, and, notably, the first-ever perpetual preferred share in the market.

Metaplanet announced back in November a two-tier listed preferred share class, Mars and Mercury. The move came after Strategy launched its own preferred shares, with Stretch (STRC) among the most popular.

Two key obstacles have stood in the way of Metaplanet’s listing of preferred shares.

First, Japanese exchange rules require preferred dividends to be backed by sustainable, recurring cash flows assessed across multiple market conditions. Metaplanet must demonstrate that its Bitcoin Income Generation Business can produce stable returns even in adverse bitcoin environments, and has just a six-quarter operating track record.

Second, the company’s ambition to pay monthly dividends is far more frequent than Japan’s typical once or twice-yearly cadence, which requires building entirely new dividend infrastructure around record dates.

Gerovich concluded that the company is committed to delivering preferred shares to the market and highlighted Japan’s status as one of the world’s most yield-starved major capital markets.

On the earnings, the company delivered net sales of $19.5 million (¥3.08 billion, up 251% year-on-year) and operating income of $14.4 million (¥2.27 billion, up 283%). Meanwhile, bitcoin yield came in at 2.8% quarter-to-date.

Metaplanet shares are down 25% year to date.