SharpLink Gaming saw a slight decline in its stock price despite continuing with its stock repurchase program. The company recently purchased 1 million shares at an average price of $16.67 each. However, the stock price of SharpLink, trading under the ticker SBET, dropped by 2.8% to $16.32 in the afternoon.
The stock buybacks are part of a $1.5 billion authorization approved in August. SharpLink has already retired nearly 1.93 million shares, amounting to around $32 million, using cash reserves, staking income, and other financing methods instead of debt.
Expansion of Ethereum reserves
Aside from the buybacks, SharpLink has been increasing its Ethereum holdings. The company now holds 838,152 ETH as of Sept. 16, up from 740,760 tokens the previous month, with a total value of approximately $3.86 billion. This includes 3,240 ETH earned through staking since June.
SharpLink, supported by Ethereum developer Consensys, is the second-largest corporate holder of ETH after Bitmine Immersion, which has over 2 million tokens.
Together, these two companies hold the majority of Ethereum among the approximately 70 public digital asset treasury companies that own at least 100 ETH each.
Stock buybacks and valuation strategy
SharpLink has a strategy of only repurchasing shares when its net asset value (NAV) falls below 1, indicating that the stock is undervalued compared to its crypto holdings.
As of Sept. 15, SBET’s NAV was at 0.91x, suggesting that the market was valuing its shares around 9% below its ether reserves.
While buybacks have been a common practice among digital asset treasuries, they have also faced criticism. SharpLink CEO Joseph Chalom, a former BlackRock executive, defends the program as “immediately accretive” and beneficial for long-term shareholder returns.
SharpLink shares experienced a surge earlier in the year following a partnership announcement with Consensys, reaching a high of $78 in June before retracting. The company remains focused on aligning shareholder value with Ethereum’s growth through its strategic approach of token accumulation and selective buybacks to capitalize on market opportunities.
