Sharplink Gaming has made a significant move into the crypto space by establishing an Ethereum Treasury Reserve, acquiring over $462 million in ETH. This acquisition positions Sharplink as the largest public holder of ETH, second only to the Ethereum Foundation.
Sharplink's Funding Strategy
To fund the purchase, Sharplink raised $425 million through a private placement and an additional $79 million via an at-the-market (ATM) equity offering. Most of these proceeds were used to acquire ETH, highlighting the company's commitment to building a substantial crypto reserve.
Stock Performance Amid ETH Purchase
Despite the positive news about the ETH acquisition, Sharplink's stock (SBET) experienced significant volatility. According to Google Finance, the stock dropped 12.25% on Thursday, closing at $32.50, and then fell to as low as $8 in after-hours trading. However, by Friday, it had recovered slightly to $11.05, while still maintaining a nearly 230% increase over the past month and 37% year-to-date.
Response to Share Registration Statement
The stock dip followed Sharplink's filing of an S-3 registration with the U.S. Securities and Exchange Commission, outlining a possible resale of 58.7 million shares issued during a prior private investment in public equity (PIPE) offering. This raised concerns about dilution, leading to a wave of selling. In response, Chairman Joseph Lubin clarified that the filing does not reflect any current sales, but is simply a registration for past investors' potential future sales.
Sharplink Gaming's investment in Ethereum underscores the growing importance of crypto assets in corporate strategies. Despite stock market volatility and concerns over potential dilution, the company has established itself as a key player in the realm of digital assets.
