SharpLink Announces $1.5 Billion Plan: Smart Leverage or a Gamble with Ethereum?

SharpLink Gaming – a company with a $3.4 billion Ethereum reserve (740,760 $ETH) – has just approved a stock buyback plan of up to $1.5 billion in SBET. Although the source of funds and implementation timeline have not been disclosed, this move is seen as an effort to keep the stock price above the value of ETH in reserves.

The controversy centers on whether #SharpLink must sell ETH to obtain buyback funds, as the company was previously rumored to be 'selling stock to hoard ETH.' Some views suggest this is a strategy to bolster shareholder confidence, while many investors worry that it is merely a gamble with double risk: if ETH prices drop, both the reserve and SBET stock will face pressure.

The backdrop is increasingly tense, as BitMine – another competitor also building ETH reserves – is taking a similar approach, while the market has just witnessed Windtree Therapeutics (BNB reserves) being delisted from Nasdaq.

The community raises questions: what is the source of funding for #Buyback ? Scenarios discussed include selling ETH, debt financing, PIPE fundraising, DeFi loans against mortgaged ETH, or using staking yields. Each option comes with its own cost of capital and risk.

Nevertheless, SharpLink confirms that the buyback is only 'authorized' and does not necessarily need to be executed immediately, but allows the company to act swiftly when the stock price is significantly below net asset value (NAV).

👉 This buyback plan could be leverage to help SBET rebound strongly if the market is favorable, but it could also turn into a massive gamble if ETH drops significantly.