Shares of sports betting platform Sharplink Gaming plunged 73% in after-hours trading on Thursday following a filing to register a substantial number of shares for potential resale, amid plans for a major investment in Ether.
However, Sharplink Gaming chairman Joseph Lubin—who also serves as CEO of blockchain software company Consensys—clarified that the market had misread the filing.
Lubin says neither he nor Consensys has sold any shares
In a post on Wednesday, Joseph Lubin clarified that “some are misinterpreting” Sharplink’s Form S-3 filing with the Securities and Exchange Commission, which covers the potential resale of nearly 58.7 million common shares.
Lubin emphasized that the filing is solely for the potential resale of shares, not an actual sale. “This is standard post-PIPE procedure in traditional finance, not an indication of actual sales,” he explained.
The filing coincides with the company’s plans for a major Ether purchase, part of its newly unveiled Ethereum-based treasury strategy.
Sharplink Gaming (SBET) shares closed Thursday down 12.25% at $32.53, before plummeting an additional 73% after hours to below $8 following the filing, according to Google Finance.
The stock has since seen a modest rebound and is now down 67.6%, trading at $10.55 at the time of publication.
Consensys general counsel Matt Corva also weighed in, noting that the filing “doesn’t reflect anyone’s sales, which may or may not ever happen—I have no idea. But it’s a basic filing.”
The Sharplink filing is not a new announcement, but rather a routine regulatory step
Corva noted that the news had already been disclosed two weeks prior, adding, “This is the official statement confirming that yes, SBET sold those shares to investors, and they count.”
On May 30, Sharplink Gaming announced plans to sell up to $1 billion in common shares, with the majority of the proceeds earmarked for acquiring Ether—just days after unveiling its Ethereum-focused treasury strategy.
Lubin reiterated that neither he nor Consensys has sold any shares. Consensys recently led Sharplink Gaming’s $425 million funding round to support the new Ethereum initiative.
BTCS Inc. CEO Charles Allen noted that the filing understandably sparked panic among existing shareholders. “This creates a prisoner’s dilemma: everyone rushes to sell before the others do — a classic race to the bottom,” he said.
However, Allen suggested the company might recover quickly by confirming the anticipated $1 billion Ether purchase. “If they play their cards right, we could see a surprise PR tomorrow announcing the ETH buy—which could light the match to reignite the stock,” he said.
“They may have played it brilliantly,” he added.
