Sharplink Gaming Stock Plummets Following Large Share Registration Filing

Shares of sports betting platform Sharplink Gaming (SBET) dropped 73% in after-hours trading Thursday after the company filed a registration statement allowing for the potential resale of nearly 58.7 million common shares.

Company Reassures Investors

Chairman and Consensys CEO Joseph Lubin said market participants misinterpreted the filing, stating on Wednesday that the “standard post-PIPE procedure” does not signify actual sales but merely registers shares held for potential resale. Lubin reiterated, “This is… not an indication of actual sales,” comparing it to traditional finance practices.

Consensys General Counsel Matt Corva echoed Lubin’s stance, confirming the filing details were already known for two weeks and does “not reflect anyone’s sales.” The filing registers shares sold “to investors, and they count.”

Context: Ethereum Treasury Strategy

The recent filing occurs as Sharplink prepares for a significant purchase of Ether (ETH) under its newly announced Ethereum-based treasury strategy. The company previously stated it plans to sell up to $1 billion in common shares, with the proceeds primarily intended to acquire Ethereum.

Lubin clarified neither he nor Consensys had participated in the share sales being registered. Consensys’ counsel noted the exact volume of shares registered aligns with what the company announced during its previous funding round.

Market Reaction

Commentary suggested the filing triggered panic selling among existing shareholders. Industry analyst Charles Allen noted it created a “race to the bottom,” suggesting prompt announcements regarding the $1 billion ETH purchase could potentially reverse losses.

Related: Ethereum Whale opens $11M leveraged bet amid ETH price’s 30% rise potential

Current Trading

Sharplink Gaming shares closed the regular trading session down 12.25% to $32.53. The post-market slide continued sharply after the news before recovering slightly to $10.55 at the time of reporting, indicating a total decline of 67.6%.

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 a decision.