SharpLink Stock Dives After Q2 Loss As Ethereum Price Surge Cools

In brief

SharpLink Gaming stock fell nearly 15% on Friday after the company posted poor Q2 earnings results.
The Ethereum treasury firm reported a net loss of $103 million for the second financial quarter.
ETH dipped below $4,400 on Friday amid geopolitical uncertainties and hotter-than-expected U.S. economic data.

SharpLink Gaming’s shares plummeted Friday as the online gambling marketer disclosed disappointing earnings for the second financial quarter.

The Ethereum treasury’s shares are trading at $20.04, down nearly 15% in intraday trading.

SharpLink reported $103 million in net losses for the three-month period ending on June 30—a stark contrast to its nearly $12 million net income during the same quarter last year.

Revenue came in at $1.4 million for the second quarter, down 30% from the same time last year. The company clocked $0.3 million gross profit, marking a 50% decrease from the first half of last year.

The report marks SharpLink’s first earnings report since the firm announced its pivot to an Ethereum-centered corporate strategy in May.

SharpLink’s executives attributed the recent losses to a $87.8 million non-cash impairment loss on its LSE holdings, a tokenized version of staked ETH that allows holders to use their tokens while earning rewards for locking them up on the Ethereum network. They also pointed to stock-based compensation linked to their strategic advisory agreement with blockchain infrastructure firm Consensys worth $16.4 million. (Disclosure: Consensys is one of 22 investors in an editorially independent Decrypt.)

“So there’s no confusion for our investors, I want to state plainly that this… is a non-cash loss and is a result of the company following the current accounting practices,” SharpLink Gaming Chief Financial Officer Robert DeLucia said Friday on an earnings call with analysts.

The company’s lackluster earnings came as Ethereum’s price slid below $4,400 earlier Friday, just a day after coming within striking distance of its record price of more than $4,800. The retracement followed a hotter-than-expected producer-price index report and amid handwringing over U.S. President Donald Trump’s meeting on Friday with Russian President Vladimir Putin.

SharpLink currently holds 728,804 ETH. The tokens are worth a combined $3.23 billion as of writing time, according to data provider CoinGecko.

Ethereum is trading at $4,444 as of writing time, down 2.2% over the past 24 hours, the same data shows.