Shares of SharpLink Gaming (SBET) experienced a 30% drop in early trading on Monday, following last week's surge of 2,000%. This pullback occurred after news emerged that SharpLink raised $450 million to launch an ether platform. The company announced the closing of this fundraising Monday morning.
SharpLink sold 69 million shares to secure the capital. Martin Shkreli pointed out last week that most of these shares are subject to a registration rights agreement. This agreement means they cannot be freely traded for several months, leaving only 2 million shares currently tradable.
The limited number of tradable shares can lead to significant price volatility. SharpLink's public float remains small, potentially contributing to last week's rally. The stock is now reacting to the capital raise and new leadership, but the decline has been relatively contained so far.