Shares in SharpLink Gaming plummeted more than 70 in post-hours trading Thursday after the company—which recently announced that it would create an Ethereum treasury—filed an S-3 shelf prospectus with the SEC to potentially sell securities.

Minneapolis-based SharpLink, an online gambling marketer that lists on the Nasdaq, was recently changing hands at $10.35 per share, according to Yahoo Finance data, after briefly dipping below the $8 mark in after-hours trading. It closed Thursday trading at $32.53.

A page in the SEC filing appeared to show that participants in the PIPE sale had sold off their holdings. However, Ethereum co-founder, Consensys CEO, and SharpLink Chairman of the Board Joseph Lubin wrote on X that people are "misinterpreting" the S-3 filing.

"It registers shares for potential resale by prior investors. The ‘Shares Owned After the Offering‘ column is hypothetical, assuming full sale of registered shares," Lubin wrote. "This is standard post-PIPE procedure in tradfi, not an indication of actual sales. To clarify, neither Consensys nor I have sold any shares."

Decrypt reached out to SharpLink Gaming and the SEC, but did not immediately hear back from either.

SharpLink rose to nearly $80 on May 29, two days after announcing that it had raised $425 million in a private investment in public equity, or PIPE, offering to establish an Ethereum treasury—a move that boosted its stock price more than 400.

A PIPE, or Private Investment in Public Equity, is a way for public companies to raise capital quickly by selling shares privately to institutional or accredited investors, rather than through a public offering.

The plan came amid a wave of publicly traded companies that have built crypto-focused treasuries, or raised money with that intent. They are, to varying degrees, following an approach popularized by Strategy, formerly MicroStrategy, which pivoted from software development to become a Bitcoin treasury that now holds 582,000 of the tokens worth more than $61 billion at current prices.

Other companies have also focused on Bitcoin, although a number in recent weeks have opted for treasuries based on altcoins like Solana and XRP.

Ethereum was recently trading at about $2,640, down more than 4 over the past 24 hours, according to crypto markets data provider CoinGecko.

Ethereum-centric software firm Consensys, along with firms Galaxy Digital, ParaFi Capital, Ondo, and Pantera Capital, participated in the PIPE offering, SharpLink said in a statement at the time. The group bought 69,100,313 of the firm’s shares at $6.15 each. (Disclosure: Consensys is one of 22 investors in an editorially independent Decrypt.)

Edited by Andrew Hayward

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