- Upexi and SharpLink Gaming saw their stock prices plummet recently following effective SEC registration-of-shares filings.
- The filing’s effectiveness presented PIPE investors with an opportunity to realize gains shortly after asset values surged.
- PIPE investors face a temporary period before shares become tradable, allowing token appreciation during this interval.
Private equity investors backing crypto treasury firms are capitalizing on post-offering windows, triggering dramatic stock price drops in companies like Upexi and SharpLink Gaming, Reuters reported on Monday.
Within two weeks, SharpLink Gaming’s and Upexi’s stock values plunged over 60% following the validation of their registration-statements. These post-registration rallies have erased gains accumulated since the PIPE transactions, according to data showing significant Ethereum and Solana exposures.
“Sharp-term profit taking,” noted Brian Rudick, Upexi’s CSO, describing investors cashing out after the registration became effective.
The PIPE Timing
PIPE transactions enable rapid fundraising but require founders and early investors (often hedge funds) to deploy capital over a standstill until shares can be publicly traded. This mechanism, however, allows token holders’ portfolio values to inflate significantly once the registration clears.
As previously reported, PIPE investors in SharpLink saw their holdings’ value skyrocket by more than 400% in two weeks.
Game Theory and Gamified Markets
This three-stage pricing mechanism introduces elements of game theory. PIPE investors optimistically anticipate token growth but may feel incentivized to exit quickly if they perceive others will profit from waiting.
Tokens become susceptible to rapid speculation and sell-offs around registration effective dates before the float significantly expands.
Type of Treasury Junta
There are 2 types of treasury companies:
1. established ones, like MSTR, metaplanet, gamestop, etc… with these ones what you see is what you get and you can do your analysis and choose if you wanna buy
2. ones still being established, eg XXI, SBET, NAKA etc, they’re still in…
The stock structure resembles low circulation traditional closed-end funds, potentially trading at major discounts due to anxiety about lock-up expiration, despite increasing asset backing.
This volatility contrasts with newly authorized spot crypto ETFs, which offer redeemable shares.
The effective registration coincides with the unlocking of substantially dilutive future share capacity, exacerbating follower sentiment.
