SharpLink Shares Drop on $400M Deal to Fuel ETH Buys

SharpLink Gaming, a sports betting marketing firm turned Ether treasury company, closed the trading day at a loss on Monday after announcing a $400 million deal to help it buy more crypto.

SharpLink said on Monday it entered into a share purchase agreement with “five global institutional investors” that would help boost its Ether (ETH) holdings, which it added is “expected to exceed $3 billion in value.”

The deal saw its shares sold for $21.76 each for total proceeds of $400 million and was slated to close on Tuesday, subject to conditions.

SharpLink has the second-largest ETH holdings among public companies, and Ethereum co-founder Joseph Lubin as its chair. It’s one of dozens of firms that have recently joined the trend of raising capital to buy cryptocurrencies.

SharpLink shares down on day, gain after-hours

Shares in SharpLink Gaming (SBET) closed trading on Monday down over 6.6% at $22.34 after announcing the deal. The stock recovered slightly after the bell, gaining nearly 3.5% to $23.10.

The drop on Monday reversed some of the gains the stock had enjoyed over the past five trading days, having risen to a high of over $28 in early trading on Monday.

SharpLink is still up 17.5% in the last five trading days and 189% so far this year after it started buying Ether in May.

In mid-June, shares in the company fell 73% in a single after-hours trading session after it filed to potentially resell 58.7 million of its common shares, which saw Lubin take to X to say some were “misinterpreting SBET’s” filing, which he said was a standard procedure

As of Sunday, SharpLink has scooped up a total of 598,800 ETH, currently worth $2.57 billion as Ether traded around $4,300. Its ETH holdings trail only Bitcoin (BTC) mining service provider BitMine Immersion Technologies, which holds over 1.15 million ETH worth nearly $5 billion.

SharpLink raises almost $1 billion in a week

The company has raised almost $900 million over the past week, which SharpLink co-CEO Joseph Chalom said “underscores the market’s confidence in SharpLink’s ETH treasury strategy.”

He added: “The speed and scale of these investments reflect not only investor trust in SharpLink, but also the growing recognition of Ethereum’s transformative potential.”

On Thursday, SharpLink said it made a $200 million share purchase deal with four unidentified institutional investors. Days earlier, on Aug. 5, it said it raised $264.5 million in net proceeds through an at-the-market offering.

Related: Vitalik backs Ethereum treasury firms, but warns of overleverage

SharpLink said in its latest announcement that it has about $200 million in at-the-market proceeds that it’s yet to use.

Ether back on an upswing

Ether has seen a comeback to near its all-time high after months of lagging behind Bitcoin.

ETH has traded flat over the past day, but has gained 44.5% in the past 30 days — climbing from below $3,000 to highs of above $4,300 on Monday, per CoinGecko.

It’s currently trading at $4,278, just over 12% off its all-time high of $4,878 it hit on Nov. 10, 2021.

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