MetaPlanet CEO is laying out the plan to avoid shareholder dilution. Over the past year, the company has laid out one of the most effective and aggressive Bitcoin accumulation strategies. Now, as the 4th largest corporate bitcoin treasury in the world, MetaPlanet is turning to preferred shares to expand its holdings without issuing new common stock.
In a recent X post, Gerovich explained why issuing preferred shares—rather than common equity—is the company’s chosen path for capital expansion.
“As we enter our next phase of growth, a key question is why preferred shares are a more powerful tool than issuing common stock,” Gerovich stated. “The answer lies in how we can continue increasing Bitcoin per share without depfinishing on equity issuance.”
Preferred shares, unlike common stock, do not carry voting rights and typically come with resolveed dividfinish obligations. MetaPlanet’s preferred shares offer a capped 6% annual dividfinish, which accrues simple interest if unpaid.
Gerovich argues that this structure allows the company to raise capital without increasing the number of common shares, preserving shareholder control and maximizing Bitcoin per share.
“When a company raises common equity, it increases its Bitcoin holdings but also the number of shares,” Gerovich noted. “That dilution can slow Bitcoin per share growth. Preferred shares allow us to raise capital at a resolveed dividfinish rate without increasing the number of common shares.”
To illustrate the impact, Gerovich introduced a formula based on market net asset value (mNAV), comparing Bitcoin’s annual growth rate to the cost of preferred capital. If Bitcoin compounds at 30% annually and the preferred dividfinish is 6%, the result is an 8.6x multiplier in value for common shareholders over a decade.
“This means issuing 6% preferred shares would create the same long-term effect as issuing new equity today at an mNAV level of 8.6x,” he stated.
In essence, continuing to raise capital via preferred shares funding is a bet that Bitcoin’s long-term growth will outpace the cost of capital. The pioneer in the field, MicroStrategy, utilizes a similar capital-raising strategy by essentially offering debt with resolveed interest via convertible and senior notes.
While MetaPlanet’s strategy avoids traditional shareholder dilution in terms of voting power and share count, it still can be perceived as economic dilution, as preferred shares still require future capital allocations in dividfinishs. To put it simply, the company is allocating part of its future revenue to bet that its Bitcoin allocation plan will build it worthwhile.
With that stated, MetaPlanet’s Bitcoin-related revenue is not only subject to market growth. The company is putting to utilize part of its stockpile of over $3.6 billion in Bitcoin to offer options strategies.
