SharpLink Announces Purchase Agreement with Four Institutional Investors
SharpLink, an Ethereum reserve company based in the United States, has announced a purchase agreement with four institutional investors to issue new shares at a price of $19.50 per share, raising $200 million to expand its Ethereum reserves. However, investors have criticized the discounted issuance as being favorable only to institutional investors, causing SBET’s stock price to briefly turn negative.
SharpLink’s Discounted Share Issuance? Investors Criticize Favoritism Towards Institutions
Yesterday, encouraged by the surge in ETH, Ethereum reserves companies like BitMine (BMNR) experienced significant pre-market gains. However, SBET briefly turned negative when the news broke, as investors believed that the price of $19.50 was far below the current share price (approximately $22), and was essentially a move to benefit institutional investors. This method of fundraising through new share issuance allows institutional investors to purchase new shares at a predetermined price without a lock-up mechanism. If the current market price exceeds their subscription price, institutional investors can directly sell the shares in the market, creating immediate 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
Previous Analysis on BitMine’s Early Investors
Previously, Chain News analyzed the cost and unlock time for early investors in BitMine (stock code BMNR). These investors not only made substantial profits of 15 to 34 times in a short period but also did not have a lock-up period. Following such announcements, there is typically selling pressure on the stock price, but it is often overlooked that this is the norm for such cryptocurrency companies.
Do Institutional Investors Really Dump Shares Immediately After Receiving Them?
Excluding the possible share swaps from early investors or the ultra-low price private investment (PIPE), both SharpLink and BitMine have utilized market price (ATM) methods for their fundraising. As the name suggests, this involves issuing new shares at “current market prices” for specific investors. For instance, Ark Investment Management, led by Cathie Wood, conducted a large-scale transaction through its market price stock issuance plan at the end of July, purchasing approximately 4.77 million shares of BitMine for about $182 million, translating to a cost of $38.13 per share. However, shortly thereafter, BMNR’s price dropped to $31, and Ark only began to break even yesterday.
SharpLink’s purchase agreement announced yesterday appears to be lower than the market price, but the deal was likely agreed upon before the announcement. Given that its recent stock prices have hovered around the low range of $17 to $20, pricing at $19.50 seems to fall within a reasonable range. In reality, SharpLink’s new share issuance price last week was also set at $19.45.
After a decline at the opening, SBET’s stock price rebounded alongside ETH’s rise, closing yesterday at $23.36, up 5.51%. Institutional investors are set to profit up to 20%, but the transaction is expected to be completed today (8/8). Whether anyone will actually sell their shares immediately upon receipt remains to be observed.
Can SharpLink Attract More Interest from Wall Street and General Investors?
Observing Ark, which bought BMNR weeks ago and has yet to sell, instead continuing to add to its position at low prices, may relate to the investment strategies of each institution. If SharpLink can continue to collaborate with well-known long-term investors on Wall Street, it may instill greater confidence among general investors. After all, comparing with BitMine, led by renowned Wall Street investor Tom Lee, SharpLink initially relies on its deep connections within Ethereum and the cryptocurrency sector. Whether it can attract a broader base of investors will be crucial for its stock price’s sustained upward trajectory. SharpLink has not announced the list of investors participating in the new share subscription.
Risk Warning
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