SharpLink Gaming Ltd. (NASDAQ: SBET) saw its shares plummet 5% in after-hours trading on Thursday following the announcement of a substantial stock offering. The company filed a prospectus supplement with the SEC, revealing plans for an at-the-market (ATM) offering that could raise up to $6 billion.
According to the filing, SharpLink Gaming aims to increase the aggregate offering price of its common stock from the previous $1 billion limit to $6 billion. This move comes as the company seeks shareholder approval to raise the number of authorized shares, with a meeting scheduled for July 24, 2025. Until then, SharpLink will rely on Forward Sales Agreements due to current limitations on issuing more than 48,058 shares of common stock.
The significant size of the proposed offering has raised concerns among investors about potential stock dilution, which typically leads to downward pressure on share prices. While the additional capital could provide SharpLink Gaming with resources for growth and expansion, the market's immediate reaction reflects apprehension about the offering's impact on existing shareholders. As trading resumes in the regular session, investors will be closely monitoring how this development affects the stock's performance and the company's long-term strategy.
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