Ethereum Treasury SharpLink to Buy Back Up to $1.5 Billion in Stock

SharpLink Gaming can repurchase up to $1.5 billion worth of common stock under a newly authorized repurchase program, the Ethereum treasury firm said in a blog post on Friday.

With a market cap of $3.5 billion, that would be almost half of the company’s value, but Co-Chief Executive Officer Joseph Chalom described the program as a potential resource for instances when the company’s shares trade a discount to its Ethereum holdings.

“In this scenario, the accretive course of action may be to repurchase our common stock,” he said in a statement. “This program provides us with the flexibility to act quickly and decisively if those conditions present themselves.”

SharpLink shares surged more than 15% on Friday to $20.87 amid a wider upturn in crypto-focused stocks, according to Yahoo Finance, as investors turned optimistic about the prospects of an interest rate cut following remarks by U.S. central bank Chair Jerome Powell. But SharpLink’s stock price has swooned 24% over the past month even as Ethereum has gained ground. 

Ethereum was recently changing hands at $4,813, jumping more than 13% over the past 24 hours, according to crypto data provider CoinGecko. Earlier Friday, ETH set a new record high of $4,879 before retreating. The asset’s price has increased about 35% over the past month.

Like most crypto treasury firms, SharpLink seeks to maximize shareholder value by growing the amount of Ethereum it owns per fully diluted share. When SharpLink shares trade at a premium to its crypto holdings, it can issue common stock to increase that ratio.

Strategy, formerly MicroStrategy, has used the tactic for years, but its premium has been substantially greater and existed far longer. On Friday, SharpLink had a so-called mNAV of 1.08, reflecting a slight premium, according to Ethereum Strategic Reserve.

SharpLink owned 740,000 ETH worth over $3.5 billion, as of Friday. Its corporate stash was around half the size of BitMine Immersion Technologies’, which owned 1.5 million ETH that were worth around $7.3 billion. 

In the press release, SharpLink noted that the timing and amount of shares repurchased under its newly approved program will depend on market conditions. It’s not obligated to purchase any shares whatsoever, and the initiative can be suspended at any time, it added.