Sharplink Gaming Inc (NASDAQ: SBET) opened more than 450% up on Tuesday morning after announcing plans to raise $425 million through a PIPE offering.
The sports betting and i-gaming company has entered into securities purchase agreements for the sale of 69.1 million shares at a per unit price of $6.15.
SBET expects to complete the private placement by the end of this week, as per its press release on Tuesday.
Note that Sharplink Gaming stock is now trading at ten times its price from just last week.
Why is it so significant for Sharplink Gaming stock?
Sharplink plans on using the proceeds from this PIPE offering to put Ethereum on its balance sheet.
In fact, ETH will now serve as its primary treasury asset as well.
Investors are cheering SBET shares this morning also because Joseph Lubin, the co-founder of Ethereum, will join Sharplink Inc as the chairman of its board once the private placement closes.
Note that Lubin is currently the chief executive of Consensys Software, which led the aforementioned offering.
“This is an exciting time for the Ethereum community, and I’m delighted to work with Sharplink to bring the ETH opportunity to public markets,” he said in a press release today.
A bunch of other notable names participated in the investment as well, including renowned crypto venture firms like ParaFi Capital and Pantera Capital.
ETH pivot ties SBET shares to the fast-growing crypto economy
Sharplink stock is rallying hard on Tuesday because the Ethereum strategy aligns the Nasdaq listed firm with continued momentum in the crypto economy, which investors believe is a progressive approach to unlocking shareholder value.
ETH holdings will position SBET to benefit from adoption-driven upside in the world’s 2nd largest cryptocurrency by market cap.
Note that Ethereum is the leading blockchain for smart contracts and decentralised applications.
More importantly, such a crypto strategy has precedence.
For years, Virginia-based Strategy (formerly known as MicroStrategy) has used cash on hand to invest in Bitcoin – a strategic pivot that’s pushed its stock price up more than 2,000% within a few years.
“This is a significant milestone in Sharplink’s journey and marks an expansion beyond our core business,” said Rob Phythian, the chief executive of SBET, in a press release today.
Is it worth buying Sharplink stock on Tuesday?
Turning to Ethereum to potentially benefit from the expected upside in it could reinvigorate SBET, that’s been mired in losses and sales decline this year.
The sports betting and i-gaming company recently reported a 24% annualised decline in sales for its first financial quarter on a loss of nearly $1 million, down sharply from over $12 million of “net income” a year ago.
Sharplink isn’t a very widely covered stock among Wall Street analysts. But the ETH pivot could change that moving forward as well.
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