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SharpLink Gaming Announces $1 Billion Stock Offering to Build Ethereum Treasury
SharpLink Gaming has unveiled plans to issue up to $1 billion worth of common stock to acquire Ethereum, aiming to bolster its cryptocurrency holdings. This strategic move reflects the company’s growing focus on building an Ether treasury.
Details of the Stock Offering
According to an SEC filing, the U.S.-based company intends to issue up to 72.05 million shares of common stock under the symbol “SBET.” Approximately 12.6 million shares in the offering will be priced at $79.21 per share, based on the sale price registered on Nasdaq as of May 29. The final number of shares issued will depend on the offering price and how many shares the company decides to sell.
SharpLink Gaming stated in the filing that all proceeds from the stock offering will be used to acquire Ethereum (ETH). The company emphasized its commitment to this strategy, noting, “We intend to use substantially all of the proceeds from this offering to acquire Ether, the native cryptocurrency of the Ethereum blockchain commonly referred to as ‘ETH.’”
Potential Impact on Ethereum Holdings
If SharpLink Gaming successfully sells all its common shares, it would have sufficient funds to purchase $1 billion worth of Ethereum. Based on current market prices, this could translate to an accumulation of approximately 400,000 ETH. This strategy has drawn comparisons to Michael Saylor’s approach with Bitcoin, where his firm, MicroStrategy, became the largest corporate Bitcoin holder.
Market Reaction
Following the announcement, SharpLink Gaming’s stock experienced a sharp decline. In pre-market trading on June 2, shares plummeted by 24%, dropping from $76.70 to $58.15. This contrasts with the market’s reaction to the company’s earlier announcement of raising $425 million in private placements to start an Ethereum treasury, which saw its stock soar by 420% in pre-market trading, jumping from $6.72 to $34.75.
Earlier Ethereum Treasury Announcement
On May 27, SharpLink Gaming revealed its intention to adopt Ethereum as its principal treasury asset. The company aimed to raise $425 million through private equity placement to purchase Ethereum. Following this announcement, Ethereum co-founder Joseph Lubin was appointed Chairman of SharpLink Gaming’s board.
Corporate Interest in Ethereum Treasuries
SharpLink Gaming is not the first company to establish an Ethereum treasury. However, the number of corporations accumulating Ethereum remains significantly lower compared to those investing in Bitcoin. For example, on May 19, French real estate firm Entreparticuliers announced plans to accumulate ETH, effectively becoming an Ethereum treasury company. The news caused Entreparticuliers’ stock to surge by over 800% within five days of the announcement.
Current Market Update
At press time, Ethereum has experienced a slight dip, trading at $2,484 with a market cap nearing $300 billion. The cryptocurrency has declined by 0.4% in the past 24 hours. SharpLink Gaming’s strategic move could potentially influence Ethereum’s market dynamics as corporate interest in the asset grows.
Key Takeaways
- SharpLink Gaming plans to issue up to $1 billion in common stock to acquire Ethereum.
- The company aims to build an Ethereum treasury, following similar strategies seen in Bitcoin investments.
- Market reactions have been mixed, with stock prices fluctuating sharply after the announcements.
- Corporate interest in Ethereum treasuries is growing but remains smaller compared to Bitcoin holdings.
As Ethereum continues to gain traction among institutional investors, SharpLink Gaming’s bold move highlights the increasing relevance of cryptocurrencies in corporate treasury strategies.
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