TL;DR
- SharpLink plummeted over 70% in after-hours trading after filing a document with the SEC enabling the potential resale of nearly 59 million shares.
- Consensys and its CEO, Joseph Lubin, clarified that no shares were sold and that the registration is a standard procedure following a private placement.
- The company plans to raise up to $1 billion to buy ETH, and analysts speculate that an imminent announcement could reverse the stock’s recent losses.
SharpLink posted one of the sharpest drops on Nasdaq this Thursday, plunging over 70% during after-hours trading.
The drop came after the company filed a document with the SEC allowing the potential resale of nearly 59 million shares issued to more than one hundred investors in a recent private placement. Although this process is common in traditional markets after a PIPE transaction, the publication of the filing triggered a wave of sell-offs driven by the expectation of a massive share offering.
SharpLink Drops: Victim of Speculation?
SharpLink’s stock, which had closed the session at $32.5, tumbled to as low as $8 after the market closed and later recovered part of the loss, climbing back to $11.15. Fears of a large-scale liquidation created a dynamic some executives described as a collective dilemma, where investors rushed to sell before others could do the same.
Consensys, which earlier in June led a $425 million investment in SharpLink to support a corporate treasury strategy based on Ethereum, stated that neither the firm nor its CEO, Joseph Lubin, sold any shares. Lubin explained that the share registration doesn’t imply immediate sales and clarified that it’s a technical procedure standard to any PIPE deal in public markets. He added that the number listed as “available” after the offering only reflects a hypothetical scenario in which all registered shares are sold.
Matt Corva, General Counsel at Consensys, attributed the reaction to misinformation and speculation, comparing the process to merely minting tokens in a smart contract, without implying an actual sale. He pointed out that the filing neither confirms nor anticipates any market transaction.
Ethereum Treasury Reserve
Beyond this episode, SharpLink had announced in late May its intention to raise up to $1 billion through new share offerings, with the goal of acquiring ETH for its balance sheet. Analysts like Charles Allen, CEO of BTCS, suggested that the company could soon announce a major ETH purchase, which might once again shift the stock’s behavior on the market
