SharpLink Gaming, a Nasdaq-listed firm recently repositioned around Ethereum treasury management, saw its shares tumble over 70% during after-hours trading Thursday.
The sharp decline followed the company's filing of an S-3 registration statement, which permits the resale of nearly 58.7 million common shares issued to over 100 investors as part of its private investment in public equity (PIPE) arrangement.
The move appears to have triggered confusion among investors, sparking a wave of selling pressure.
Market reacts to filing, but insiders say it's routine
The drop began shortly after markets closed, with shares of SharpLink (SBET) falling from $32.50 to as low as $8 before partially recovering to $11.15, according to Google Finance. As of today, the stock sits above $10.
The timing closely aligned with the company's regulatory filing, which allowed resale of PIPE shares but did not indicate actual sales.
In a statement posted on X, Consensys CEO and SharpLink Chairman Joseph Lubin said the market misread the filing. “It registers shares for potential resale by prior investors… this is standard post-PIPE procedure in TradFi,” Lubin noted. “No shares were sold by Consensys or myself.”
Notably, SharpLink recently attracted headlines after raising $425 million from private investors, led by Consensys, for an Ethereum-based corporate treasury initiative.
The plan includes scaling up ETH purchases as part of a larger strategy. But market sentiment flipped after the filing, with concerns over dilution or impending sales fueling the sell-off.
Matt Corva, General Counsel at Consensys, added that the S-3 filing was a standard compliance step and doesn’t indicate any transactions have occurred. “This is like acknowledging tokens exist in a smart contract. It’s TradFi paperwork,” Corva said, responding to criticism online.
Speculation grows around future ETH buys
At the end of June, SharpLink announced plans to raise up to $1 billion through common share offerings to fund future ETH acquisitions.
Charles Allen, CEO of BTCS, suggested that if SharpLink already raised the funds, it might announce a $1 billion ETH purchase soon to reverse sentiment. “If they played their cards right, a PR push with a billion-dollar ETH move could flip the narrative,” Allen said.
Whether that happens remains to be seen, but Thursday’s events highlighted how legacy finance expectations and crypto-native strategies still often collide in real-time.
