SharpLink Gaming’s stock experienced a slight dip despite the company’s continued stock repurchase initiative. The firm, actively involved in managing its
Ethereum holdings, recently acquired an additional 1 million shares.
The company, identified by the stock ticker SBET, disclosed that these recent purchases were made at an average price of $16.67 per share. However, this action wasn’t enough to prevent a 2.8% decline in SharpLink’s stock value, which settled at $16.32 in late afternoon trading in New York.
These buybacks are being conducted under a $1.5 billion plan that was sanctioned back in August. So far, the company has bought back almost 1.93 million of their own shares for approximately $32 million. The capital for these repurchases is being sourced from existing cash reserves, income generated through staking, and other financial instruments, rather than through debt financing.
Increasing Ethereum Holdings
Besides the stock buybacks, SharpLink has also been focused on increasing its Ethereum assets. As of September 16th, the company reported a holding of 838,152 ETH, a rise from the 740,760 tokens held a month prior. The total value of these holdings is approximately $3.86 billion. Notably, this figure includes 3,240 ETH earned through staking activities since June.
This company, which has the backing of Ethereum development firm Consensys, is the second-largest corporate holder of ETH. Bitmine Immersion holds the top spot with over 2 million tokens.
Combined, these two entities hold the majority of Ethereum tracked on the balance sheets of the approximately 70 public companies that specialize in digital asset treasury management, each possessing at least 100 ETH.
Stock Buybacks and Valuation
SharpLink has stated that it will only buy back its own stock when its net asset value (NAV) dips below 1. This threshold indicates to the company that its stock is being undervalued compared to the value of its crypto holdings.
As of September 15th, SBET’s NAV was at 0.91x. This means that the market was evaluating the company’s shares at about 9% less than the value of its ether reserves.
Stock buybacks are becoming more prevalent among digital asset treasuries; however, they are not without controversy. Detractors argue that buybacks could prioritize short-term stock price gains. SharpLink CEO Joseph Chalom, a former BlackRock executive, defends the strategy, arguing that the program provides “immediately accretive” value and improves long-term returns for shareholders.
SharpLink’s stock experienced a surge earlier this year after announcing a partnership with Consensys, briefly exceeding $78 in June, but has since decreased in value.
The company has reiterated its commitment to connecting shareholder value with the growth of Ethereum, further supporting its strategy of using token accumulation and selective buybacks as a means to “buy low and sell high.”