SharpLink Gaming Stock Soars After Company Adopts Ethereum Treasury Strategy: What's Happening?
SharpLink Gaming Inc (NASDAQ:SBET) shares are soaring Tuesday after the company announced a private placement with intentions to adopt an Ethereum (CRYPTO: ETH) treasury strategy.
What Happened: Micro-cap gaming marketing company SharpLink has entered into securities purchase agreements for the purchase and sale of approximately 69 million shares at a price of $6.15 per share.
The company anticipates gross proceeds of approximately $425 million before deducting placement agent fees and other offering expenses. The company intends to use the funds to acquire “ETH,” the native crypto of the Ethereum blockchain.
Consensys Software is acting as the lead investor. The offering also includes participation from crypto venture capital firms and infrastructure providers, and is expected to close on or about May 29. Joseph Lubin, founder and CEO of Consensys and co-founder of Ethereum, will become chairman of the board.
SharpLink said Ethereum will serve as the company’s primary treasury reserve asset moving forward.
“On close, Consensys looks forward to partnering with SharpLink to explore and develop an Ethereum Treasury Strategy and to work with them in their core business as a strategic advisor. This is an exciting time for the Ethereum community, and I am delighted to work with Rob and the team to bring the Ethereum opportunity to public markets,” Lubin said.
The news comes after SharpLink shares surged on abnormally high volume on Friday, closing the day up more than 75%.
More than 28 million shares have already been traded on Tuesday, well above the 100-day average of approximately 222,000.
SharpLink is considered a low-float stock with just 620,682 shares available for public trading, according to Benzinga Pro. The company also had a market cap of less than $4.5 million as of Friday's close. Low-float, micro-cap stocks can be extremely volatile, which may help explain some of Tuesday's surge.
SBET Price Action: SharpLink Gaming shares were up 482% at $39.01 at the time of publication Tuesday, according to Benzinga Pro.
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