SharpLink Gaming Inc. (NASDAQ: SBET) shares dropped 73% over the last week, closing Thursday afternoon at $10.05 after trading over $38 earlier in the week. The selloff was prompted by a U.S. Securities and Exchange Commission (SEC) filing, which investors misinterpreted as a large-scale insider sale.
The filing followed up on a shelf registration statement linked to approximately 58.7 million shares, as part of SharpLink’s $425 million private investment in public equity (PIPE) raise last month.
While this kind of S-3 filing is routine following a large capital raise like that, its timing sparked panic. Trading in the stock surged as the price plummeted almost 75% in after-hours trading on June 12 and then steadied at around $10.
The leaders of SharpLink acted quickly to calm the market. Both the co-founder of Ethereum and chairman of SharpLink, Joseph Lubin, and ConsenSys’s general counsel stated that neither they nor any of SharpLink’s insiders had sold any stock. Instead, the document filed was registering shares that would be sold in the future.
PIPE funds were used earlier this month to purchase more than 176,000 ETH, worth approximately $463 million, making SharpLink one of the largest institutional ETH holders behind the Ethereum Foundation. The firm has also been increasingly accessing new sources of funds via an at-the-market (ATM) equity offering program, which has dedicated $1 billion for the future purchase of ETH.
Underlining the market response as a “prisoner’s dilemma,” CEO Charles Allen said worries of dilution drove preemptive selling. Although the principles remain the same, investor mood may depend on the company’s next action regarding ETH and improved communications ahead.
At press time, Ethereum was trading at $2,529.44, down over 7% in the last 24 hours, as per Kraken.
Stock’s link to shocking asset triggers 70% drop post-SEC filing first appeared on TheStreet on Jun 13, 2025
