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Sharplink Gaming Shares Plummet 73% Ahead of $1 Billion Ethereum Purchase

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Executive Summary

Shares of sports betting platform Sharplink Gaming tumbled 73% in after-hours trading on Thursday after filing to register a large volume of shares for potential resale, as the company prepares to make a significant bet on Ethereum.

Lubin Clarifies Market Misinterpretation

However, Sharplink Gaming Chairman Joseph Lubin, who is also CEO of blockchain software firm Consensys, stated that market observers had misinterpreted the filing.

Consensys founder Joseph Lubin

Consensys founder Joseph LubinConsensys

Lubin emphasized in a Wednesday post that “some are misinterpreting” Sharplink’s Form S-3 filing with the Securities and Exchange Commission (SEC), which registers the potential resale of nearly 58.7 million common shares.

Clarification on Registration Nature

Lubin stressed that this is a registration for the “potential resale” of shares, not an actual sale. “This is standard post-PIPE procedure in traditional finance, not an indication of actual sales,” Lubin explained.

The filing occurs as the company prepares for a significant Ether (ETH) purchase as part of its newly announced Ethereum-based treasury strategy.

Detailed Stock Price Movement

Sharplink Gaming (SBET) shares closed Thursday trading down 12.25% at $32.53 and plunged an additional 73% after hours to under $8 following the filing announcement, according to Google Finance data.

At the time of writing, the stock has slightly recovered and is down 67.6%, trading at $10.55.

Response from Consensys

Consensys General Counsel Matt Corva stated that the filing “doesn’t reflect anyone’s sales, which may or may not ever happen, I have no idea. But it’s a basic filing.”

Information Not New

Corva mentioned that this news was already revealed two weeks ago, and “this is the official statement saying yes, SBET sold those shares to investors, and they count.”

Sharplink Gaming’s Ethereum Treasury Strategy

On May 30, Sharplink Gaming announced plans to sell up to $1 billion in common shares, with most proceeds intended to acquire ETH, just days after announcing the adoption of an Ethereum-focused treasury strategy.

Lubin clarified that neither he nor Consensys had sold any shares. Consensys recently led Sharplink Gaming’s $425 million funding round for the Ethereum treasury strategy.

Market decline visualization

Market decline visualizationAlamy

Expert Analysis

BTCS Inc. CEO Charles Allen commented that the filing understandably triggers panic among existing shareholders. “This creates a prisoner’s dilemma: everyone rushes to sell before others do – a classic race to the bottom,” he said.

Future Predictions

Allen suggested the firm could reverse those losses by announcing their anticipated $1 billion Ether purchase tomorrow. “If they played their cards right, I would expect a surprise PR tomorrow with $1B of ETH purchases – which could light the match to reignite the stock,” Allen stated.

“They may have played it brilliantly,” he said.

Important Notice for Investors

Risk Advisory: This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making decisions.