Sharplink Bets on Itself: A $1.5B Gamble to Fix the NAV Discount

The Ethereum-based treasury firm Sharplink has initiated a $1.5 billion share buyback program as its stock trades below its net asset value (NAV), signaling a strategic move to bolster shareholder value. Sharplink, which holds approximately 837,230 ETH valued at around $3.59 billion, announced the buyback in a bid to capitalize on what it describes as a “compelling investment” opportunity. The firm’s common stock is currently trading at a significant discount to its NAV, making the buyback immediately accretive to shareholders.

On Tuesday, Sharplink executed its first repurchase under the program, acquiring 939,000 common shares at an average price of $15.98. The company emphasized that the initiative aligns with its broader strategy to deploy capital efficiently, particularly in light of its strong balance sheet and lack of outstanding debt. “We believe the market currently undervalues our business,” said Co-CEO Joseph Chalom. “Rather than issuing equity while trading below NAV, we are focused on disciplined capital allocation,” he added. The move follows a broader trend among digital asset treasury firms, where analysts have increasingly recommended buybacks when shares trade below NAV to preserve value and avoid dilution.

Sharplink’s share price has seen a mixed performance in recent weeks. While the stock surged 6.51% on Tuesday and closed at $16.69 on Wednesday, it remains down 25.29% over the past 30 days. The firm noted that its stock price is trading at a 0.87 multiple of its market net asset value (mNAV), as per its dashboard, a valuation that limits its ability to raise capital via equity issuance without diluting its ETH per share metric. Nearly all of the firm’s ETH holdings—approximately $3.6 billion in total—are staked, generating material revenue for the company through blockchain rewards.

The firm has also stated that it has not utilized its At-the-Market (ATM) facility for share issuance while trading below NAV, a decision it attributes to the risk of diluting its ETH holdings per share. However, it reserves the right to use the ATM in an “accretive manner” should market conditions improve. Analysts from NYDIG have previously advised similar strategies, recommending that digital asset treasury (DAT) companies retain some capital for buybacks when shares trade below NAV to support their stock and preserve long-term value.

The buyback program aligns with broader market conditions affecting the crypto sector, which has seen a cooling trend in recent weeks. Rival firms, including BitMine, have also fallen below their respective mNAV thresholds, with both companies experiencing declines of around 60%-70% from their July highs. This broader market correction has intensified the strategic importance of buybacks for companies like Sharplink, which aim to navigate the volatile environment while maintaining confidence in their long-term positioning.

Sharplink remains committed to its Ethereum-centric strategy, reinforcing its role as one of the largest ETH treasury companies. It has launched a dynamic ETH dashboard to provide greater transparency to investors, detailing metrics such as market data, ETH concentration, and mNAV. The firm continues to emphasize its long-term vision for Ethereum adoption and digital capital innovation, with the buyback program serving as a key component of its capital allocation framework.