TLDR
- SharpLink Gaming purchased $15 million of its own shares at $15.98 each, buying 939,000 shares total
- The ETH treasury company’s stock trades at 0.87x net asset value despite holding $3.6 billion in Ethereum
- Stock gained 3.6% in pre-market trading following the buyback announcement
- Company has avoided selling shares while trading below NAV to prevent diluting ETH per share
- Digital asset treasury firms have dropped 60-70% from July peaks as crypto markets cooled
SharpLink Gaming executed a $15 million share repurchase program on Tuesday. The Ethereum treasury company bought approximately 939,000 shares at an average price of $15.98 per share.
The Nasdaq-listed firm holds $3.6 billion worth of Ethereum tokens. Nearly all of these holdings are staked to generate income for the company and its shareholders.
SharpLink’s stock currently trades below the value of its cryptocurrency assets. The company’s market capitalization sits below its ETH holdings, creating what management considers an undervalued situation.
Joe Lubin serves as executive chairman of SharpLink Gaming. Lubin co-founded Ethereum and leads the Minneapolis-based treasury firm’s strategic direction.
Stock Performance and Market Dynamics
The stock gained 3.6% in pre-market trading after announcing the buyback. Ethereum prices also rose more than 1% since Monday’s market close, supporting the broader recovery.
SharpLink trades at 0.87 times its net asset value according to company data. This discount prevents the firm from effectively raising capital through equity sales for additional ETH purchases.
The company has not utilized its at-the-market facility while trading below NAV. Management wants to avoid diluting the ETH holdings per share metric that drives shareholder value.
Digital asset treasury companies face sector-wide pressure from cooling crypto markets. Rival firm BitMine, holding nearly $9 billion in ETH, also trades below net asset value thresholds.
Treasury Strategy Challenges
SharpLink’s business model depends on selling shares above NAV to fund Ethereum purchases. When stock prices fall below asset values, this primary funding mechanism becomes ineffective.
Both SharpLink and BitMine have declined 60-70% from their July highs. The sharp drops coincide with broader cryptocurrency market weakness over recent weeks.
Treasury firms typically command premiums during bull markets when investors pay extra for professional management. The current discount environment limits their ability to execute growth strategies effectively.
SharpLink believes its stock remains undervalued relative to underlying ETH assets. The company views share repurchases as compelling investments that demonstrate confidence in long-term prospects.
The firm generates income by staking its Ethereum holdings. This approach provides steady cash flows while maintaining exposure to potential ETH price appreciation.
SharpLink completed the buyback under its existing share repurchase authorization. The company has not announced additional buyback plans at current trading levels.
The 0.87x NAV multiple means investors can purchase SharpLink shares at a discount to direct ETH ownership. However, this discount creates operational challenges for the treasury company’s core business model.
Management stated the buyback underscores confidence in SharpLink’s strategy and growth prospects. The company continues to hold and stake its substantial Ethereum position while markets recover.
