“SharpLink Gaming’s Stock Price Plummets 70% in After-Hours Trading: What Happened with the Ethereum-Based MicroStrategy?”

SharpLink is Building “Ethereum Reserves”

SharpLink Gaming (SBET), a Nasdaq-listed company, originally drew market attention for its initiative to incorporate Ethereum (ETH) into its asset reserves. However, the stock faced a severe setback after hours on Thursday, plummeting over 70%.

Concerns Arise from Stock Issuance, Sudden Turn of Events

SharpLink had just announced earlier this month the completion of a PIPE fundraising round, raising $450 million, which would be used to purchase ETH as a long-term reserve asset. Institutions participating in this round included ConsenSys, Galaxy, and Pantera Capital, with Ethereum co-founder Joseph Lubin directly joining SharpLink’s board as chairman. This move positioned SharpLink as the first publicly traded company to make Ethereum a core component of its financial strategy, attracting significant interest.

Market Rumors Suggest SharpLink May Have Secretly Acquired More ETH?

However, the company’s stock plummeted nearly 70% after yesterday’s market close.

According to CoinDesk, the panic sell-off in the market was triggered by a new filing submitted by SharpLink to the U.S. Securities and Exchange Commission (SEC). The document revealed that the company would allow prior PIPE investors to sell nearly 58.7 million shares, resulting in significant selling pressure that shattered investor confidence and caused the stock price to collapse.

The SEC filing on Thursday indicated that over a hundred PIPE investors were about to be permitted to resell their shares in the market, interpreted by the market as a “release of lock-up and mass cashing out,” which subsequently led to a wave of panic selling. BTCS CEO Charles Allen stated that this document effectively allowed investors to “take profits early,” undermining the market’s expectations regarding its ETH reserve strategy.

Overall Crypto Market Experiences a Concurrent Decline

Despite the stock price drop, Charles Allen believes this could also be a strategic smokescreen by SharpLink.

He pointed out that the company had submitted a filing for an “At-the-Market” (ATM) offering as early as the end of May, potentially allowing them to quietly raise up to $1 billion without prior announcement, and possibly acquire more ETH. He speculated: “Maybe tomorrow we will see a press release announcing: SharpLink buys Ethereum with $1 billion, reigniting market excitement.”

Meanwhile, the overall crypto market also faced a significant decline due to deteriorating conditions in the Middle East, with ETH dropping nearly 10% in the past 24 hours, priced at around $2,497, while Bitcoin also experienced a simultaneous drop.