SharpLink Gaming (SBET) announced on Monday morning the successful close of its $450 million capital raise, which it plans to use to purchase Ethereum (ETH) for its treasury.
Following last week’s astonishing 2,000% surge, SharpLink shares dipped 30% in early trading Monday, giving back some of the recent gains.
The dramatic price jump—from under $3 to above $100 at its peak—came after the company revealed plans to raise $450 million to implement an Ethereum treasury strategy. The announcement also included that Ethereum co-founder Joseph Lubin would join SharpLink’s board as chairman.
SharpLink sold 69 million shares in the fundraising round. However, pharmaceutical entrepreneur Martin Shkreli pointed out that most of these shares are currently restricted. “The 69 million shares issued are subject to a registration rights agreement, which won’t take effect for several months. Until then, only the 2 million shares are freely tradable,” he explained.
When companies raise capital through private placements, the newly issued shares typically come with trading restrictions until the company completes a regulatory registration process. This registration can take months, limiting the number of shares available for public trading and often causing increased price volatility.
In SharpLink’s case, the public float—the shares available for trading—is still very limited. This scarcity likely contributed to last week’s explosive rally, as traders rushed to buy the small pool of available shares.
Now, after the surprise announcement of a massive capital raise and the involvement of a prominent crypto figure, the stock has pulled back, but only moderately so far.
