SharpLink Gaming (SBET) confirmed Monday morning the close of its $450 million fundraising round, which it plans to use for purchasing Ethereum (ETH) to strengthen its treasury holdings.
Following an extraordinary 2,000% surge last week, SharpLink shares dropped 30% in early trading Monday, giving back part of the previous week’s massive rally.
The stock’s meteoric rise—from under $3 to briefly topping $100—was fueled by the announcement of the capital raise alongside Ethereum co-founder Joseph Lubin’s appointment as chairman of the company’s board.
SharpLink issued 69 million shares in this private placement, but pharmaceutical entrepreneur Martin Shkreli pointed out that most of these shares are locked up under a registration rights agreement. “These shares won’t become freely tradable for months; currently, only 2 million shares are available on the market,” he said.
Typically, shares issued via private placements come with restrictions on resale until the company completes regulatory filings, a process that can take several months. This limits the public float, often resulting in increased volatility.
In SharpLink’s case, the small pool of publicly tradable shares likely contributed to last week’s explosive price movement as investors scrambled for access.
Now, with the funding round closed and new leadership onboard, the stock is pulling back modestly as the market digests these developments.
