Japan ignites a retail investor craze for corporate bonds, could Metaplanet's 6% preferred shares trigger the Bitcoin flywheel effect again?

Facing inflation issues, Japan has recently seen a wave of retail investors buying corporate bonds, with companies like Rakuten and Keio attracting young people through low thresholds and lottery activities. Meanwhile, will Metaplanet, which is set to hold an extraordinary shareholders’ meeting on September 1, successfully raise funds through preferred shares with an excellent 6% interest rate, and restart the Bitcoin flywheel?

Japanese companies are issuing corporate bonds that retail investors can buy with low principal.

According to data compiled by Bloomberg, in the first five months of the current fiscal year starting from April 1, Japanese companies have issued bonds to individuals totaling about 1.5 trillion yen (approximately 10.2 billion USD). The total for the previous fiscal year set a record of about 2.4 trillion yen.

After experiencing decades of zero/negative interest rate policies, Japan is facing high inflation issues this year. The market expects the Bank of Japan may raise interest rates again this year. Although Japan’s major stock indices are currently hovering near historical highs, with returns quite tempting, the volatility of the stock market this year highlights the appeal of fixed-income bond yields.

Many retail investors believe that bonds provide interest income, and as long as there is no default, the principal can be returned, which is more attractive than putting money in the bank.

Several companies in Japan have also started issuing corporate bonds that retail investors can invest in with low principal amounts. For example, the five-year bonds issued by SoftBank Group have an interest rate as high as 3.34%, which is nearly three times the yield of government bonds of the same maturity, making it highly attractive to non-professional investors.

Low barriers combined with lottery activities attract the younger demographic.

The Railway and Leisure Group Keio Group (KEIO) has issued its first retail bond in 31 years, with a minimum investment of 500,000 yen (, approximately 100,000 New Taiwan Dollars ), and an interest rate of 0.99%~1.59%. A lottery event is also held, with prizes including a stay at the luxurious Keio Plaza Hotel in Tokyo, dinner at a high-end teppanyaki restaurant, and tickets to FC Tokyo football matches.

The Japanese Rakuten Group uses the “Rakuten Kaman” character as the main visual, combining anime style to attract the younger demographic. Together with the subscription activities, they offer Rakuten points and lottery opportunities to increase participation rates. You can subscribe for just 100,000 yen (, which is about 20,000 New Taiwan dollars ).

Is Metaplanet’s 6% preferred stock more attractive?

The Japanese version of MicroStrategy Metaplanet will hold an extraordinary shareholders’ meeting on 9/1 to vote on the issuance of perpetual preferred stock with an interest rate of up to 6%, hoping to raise 555 billion yen in funds to purchase Bitcoin.

(Metaplanet mimics MicroStrategy’s issuance of preferred shares, with an interest rate of up to 6%, and the stock price has plummeted by 7%)

CEO Simon Gerovich regards preferred shares as a “defensive mechanism” that allows Metaplanet to raise funds without diluting the rights of common stock shareholders.

Eric Trump, the son of the President of the United States and also an advisor to Metaplanet, plans to attend the event. According to a statement, he has acquired 3.3 million shares of the company through stock options.

Metaplanet’s preferred stock will pay a dividend of up to 6%, with an initial issuance amount not exceeding 25% of the company’s Bitcoin holdings value. Eric Benoist, an analyst at French foreign trade bank, stated that the high dividends of these securities may be attractive to investors in countries where interest rates have hovered near zero for decades.

According to a report by Bloomberg, the issuance of preferred shares is not common in Japan. It is worth paying attention to whether Metaplanet can successfully raise funds through preferred shares to restart the Bitcoin flywheel, especially since a 6% interest rate seems more attractive than Rakuten’s corporate bonds.

This article discusses the surge of retail investors in corporate bonds in Japan, with Metaplanet’s 6% preferred stock possibly reigniting the Bitcoin flywheel effect? First appeared in Blockchain News ABMedia.