SharpLink Gaming Ltd. faces significant investor backlash after announcing a $463 million purchase of Ethereum, intended to position the company among the largest public holders of ETH. The strategic move, aimed at incorporating the volatile digital asset into its corporate treasury, triggered a dramatic 91% decline in its stock price (SBET) within two weeks.
The sharp stock drop was fueled by widespread investor concerns over potential shareholder dilution and excessive leverage. Trading volumes surged to approximately ten times the average, signaling intense panic selling in the market.
Steven Zheng, Research Analyst at The Block, observed a pattern of skepticism, noting that most participants in the associated private placement sold their shares within a month of the Ethereum treasury strategy being unveiled. This highlights deep-seated reservations among investors regarding the approach.
While Ethereum itself has shown strong performance recently, SharpLink’s experience mirrors the inherent risks observed in other corporate crypto treasury strategies. The incident underscores the critical importance of transparent communication and robust risk management frameworks when integrating highly volatile digital assets like Ethereum into corporate financial planning.