SharpLink Issues New Shares at a Discount? Retail Investors Angrily Criticize Profiteering by Institutional Investors
SharpLink Announces Purchase Agreement with Institutional Investors
SharpLink, a U.S. Ethereum treasury company, has announced a purchase agreement with four institutional investors to issue new shares at a price of $19.5 per share, aiming to raise $200 million to expand its Ethereum reserves. However, the investors have criticized the discounted issuance as benefiting institutional investors, causing SBET’s stock price to briefly turn negative.
SharpLink’s Discounted Share Issuance? Investors Criticize Favoritism Towards Institutions
Yesterday, spurred by a surge in ETH prices, Ethereum treasury companies like BitMine (BMNR) saw significant pre-market gains. However, SBET turned negative when the news broke, as investors felt that the $19.5 price was significantly lower than the current stock price (approximately $22), which essentially favors institutional investors. This method of fundraising through new share issuance allows institutional investors to buy new shares at an agreed-upon price without any lock-up mechanism. If the current market price exceeds their subscription price, institutional investors can quickly sell the shares in the market, creating selling pressure for quick profits.
NEW: SharpLink raises $200M in a direct offering led by four global institutional investors at $19.50/share. This capital will be used to expand our Ethereum treasury, expected to surpass $2B upon full deployment. At SharpLink, our mission is simple: Accumulate ETH. Stake ETH.…pic.twitter.com/ABv7CH9Cqt — SharpLink (SBET) (@SharpLinkGaming) August 7, 2025
Previously, Chain News analyzed the costs and unlocking periods for early investors in BitMine (stock code BMNR). These investors managed to earn profits of 15 to 34 times their investment in a short period without any lock-up period. Such announcements often lead to selling pressure on stock prices, but this is, in fact, a common practice among cryptocurrency companies.
Do Institutional Investors Really Dump Shares Immediately After Acquisition?
Excluding the possible share exchanges by early investors, or the extremely low-price private investment (PIPE) subscriptions, the fundraising channels used by SharpLink and BitMine afterwards are through market price (ATM) share issuances. This means issuing new shares at the “current market price” for specific investors. For instance, Ark Investment Management, led by Cathie Wood, conducted bulk transactions at the end of July under its market price stock issuance program, purchasing approximately 4.77 million shares of BitMine for a total value of $182 million, with a cost basis of $38.13 per share. However, BMNR subsequently dropped to $31, and Ark only started to break even yesterday.
SharpLink’s announced purchase agreement, while seeming low compared to the market price, likely had the transaction agreed upon before the announcement. Considering its recent stock price has hovered around $17 to $20, a pricing of $19.5 seems reasonable. In fact, the new issuance price last week was also $19.45.
After a dip at the opening, SBET’s stock price rose again alongside ETH, closing at $23.36, up 5.51%. The profits for institutional investors from this transaction are expected to reach as high as 20%, but the transaction is expected to be completed today (August 8), so it remains to be seen if anyone will sell their shares immediately upon acquisition.
Can SharpLink Further Attract Wall Street and General Investors?
Observing Ark, which has been holding BMNR for several weeks without selling and continuing to accumulate at lower prices, this may relate to the investment styles of different institutions. If SharpLink can continue to collaborate with well-known long-term investors from Wall Street, it might instill greater confidence in general investors. After all, compared to BitMine, which is led by well-known investor Tom Lee, SharpLink’s initial advantage lies in its deep connections with Ethereum and the cryptocurrency sector. Whether it can attract a broader range of investors will be crucial for its stock price to continue rising in the future. SharpLink did not announce the list of investors participating in the new share subscription.
Risk Warning
Investing in cryptocurrencies carries a high risk, and prices can be highly volatile. You may lose your entire principal. Please carefully assess the risks.
