Article source: Nancy
Author: Nancy, PANews
A small U.S. stock company, SharpLink Gaming, which was originally little noticed and had its stock price hovering on the edge of delisting, suddenly became the focus of the crypto market.
On May 27, SharpLink announced it had completed approximately $425 million in private placement financing and would significantly increase its purchase of ETH as its main treasury reserve asset. This crypto gamble sparked intense discussions in the community, with many even calling it the 'Ethereum version of Strategy.'
Betting on ETH as a treasury reserve asset, obtaining $425 million in financing for a market cap of $2 million.
According to the announcement released by SharpLink, the company has signed a securities purchase agreement to raise approximately $425 million through a public company's private investment in public equity (PIPE). According to the agreement, the company will issue about 69.1 million shares of common stock (or equivalent securities) at a price of $6.15 per share, with the subscription price for management team members being $6.72 per share.
This round of financing features a luxurious lineup, led by Ethereum infrastructure developer ConsenSys, with participating institutions including ParaFi Capital, Electric Capital, Pantera Capital, Galaxy Digital, Ondo, GSR, and Republic Digital. In addition, SharpLink's CEO Rob Phythian and CFO Robert DeLucia also participated in this subscription. However, these participating institutions did not announce any related news on Twitter or their official website.
According to the company's announcement, the proceeds from the financing will primarily be used to purchase ETH, which will become SharpLink's main treasury reserve asset in the future. A portion of the funds will be used for daily operations and other general corporate purposes.
This transaction is expected to be completed around May 29, 2025. The most iconic step is the joining of Ethereum co-founder and ConsenSys CEO Joseph Lubin, who will serve as the chairman of SharpLink's board and assist the company in developing its core business as a strategic advisor. ConsenSys plays an important role in the Ethereum ecosystem and is the driving force behind core tools like Infura and MetaMask. Lubin's joining is not only a badge of identity but also a deep strategic binding.
On the day the financing news was announced, SharpLink's stock price surged to a high of $50, a new high since May 2023. Currently, SharpLink's valuation has jumped to $2.5 billion. It is worth noting that just a week ago, it was a marginal stock with a daily trading volume of only a few tens of thousands of dollars and a stock price hovering around a few dollars, with a market capitalization of less than $2 million.
Deeply mired in financial difficulties for many years, it was once on the verge of delisting.
Behind SharpLink's transformation into the crypto market is a meticulously planned deep reconstruction of its business and identity.
SharpLink is an online technology company based in Minneapolis, Minnesota, USA, focused on providing performance-driven marketing solutions for the sports betting and iGaming (online gambling) industries. The company helps leading sports betting and online casino operators around the world attract, acquire, and retain players through its iGaming affiliate marketing network PAS.net. In addition, SharpLink operates a series of state-specific affiliate marketing websites targeting players, aimed at directing local sports betting and online casino traffic to its partners.
In recent years, SharpLink has faced dual pressures of declining revenue and deteriorating finances, and only achieved a turnaround in net income last year. According to SharpLink's announced financial data for the full year 2024, the annual revenue fell 26.1% year-on-year, with only $3.662 million in revenue for the entire year. Although tax benefits from terminating business generated about $10.09 million in net profit, it did not mask the fatigue of its main business. Moreover, by the end of 2024, SharpLink's cash reserves were about $1.436 million, a decrease of 42.2% from $2.487 million at the end of 2023. Facing tight funds, SharpLink raised about $1.83 million in 2024 through 'market issuance' (ATM).
In order to stem the bleeding, SharpLink sold its core assets in fantasy sports and game development at the beginning of 2024, raising $22.5 million in cash, repaying approximately $19.4 million in debt, and relocating its registered office from Israel to Delaware, laying a solid foundation for subsequent compliance and capital operations. Rob Phythian commented at the time, 'The sale of fantasy sports and the SHGN business, along with the debt repayment, marks a turning point in SharpLink's history. The company has now completed its focus and downsizing, allowing it to concentrate on its core affiliate marketing business and emerging growth areas.'
Additionally, to improve the trading price per share and avoid mandatory delisting from Nasdaq, SharpLink implemented a 1-for-12 reverse stock split in May 2025.
This series of strategic adjustments has laid the foundation for SharpLink's transformation into an Ethereum reserve company. In February 2025, SharpLink took its first step into the crypto world by acquiring a 10% stake in the UK-based Armchair Enterprises Limited (the parent company of CryptoCasino.com) for $500,000 in cash, and obtained preferential rights for future controlling stake acquisitions. CryptoCasino.com is a blockchain-based online gambling platform that supports over 20 mainstream cryptocurrencies, including Bitcoin, Ethereum, and Litecoin, for deposits and betting, offering over 6,000 gambling games, and the platform has launched its native token $CASINO. Although this move did not boost the company's stock price at the time, it sent a signal of transformation to the outside world.
However, SharpLink's revenue scale is still small, its main business is still in the early stages of transformation, and its financial structure is still under pressure. Why do heavyweight crypto institutions like ConsenSys still choose to invest heavily? The reason is that compared to crypto-native companies, building an on-chain treasury through a Nasdaq-listed company is not only highly persuasive to the market but can also trigger a broader range of capital market interactions, potentially changing the capital market's perception of Ethereum. Similar to the strategy of placing Bitcoin into a listed company and leveraging the capital market to amplify value, the arbitrage model has gained far more than the stock price premium itself and has been widely recognized by the market, attracting numerous followers.
Joseph Lubin also commented on this investment, saying, 'After the transaction is completed, ConsenSys looks forward to collaborating with SharpLink to jointly explore and formulate Ethereum treasury strategies and serve as a strategic advisor in its core business. This is an exciting moment for the Ethereum community, and I am very pleased to work with Rob and his team to bring the potential of Ethereum into the public capital markets.'
However, whether SharpLink can withstand the test of market cycles with the financial leverage effect brought by ETH reserves, and whether it can replicate the capital miracle of Strategy, still needs time to verify.
