SharpLink buyback new flywheel launched, mNAV still below 1, official guarantee of SBET lower limit?

SharpLink, the Ethereum reserve company led by Ethereum co-founder Joseph Lubin, announced that it has initiated a stock buyback program to purchase its own SBET shares, with the first round of buybacks totaling approximately 939,000 common shares at an average buyback price of $15.98. After the first wave of buybacks, its mNAV remains below 1, seemingly setting a lower limit for SBET's stock price. SBET rose 6.51% yesterday, closing at $16.69, and according to official data, its stock price still has an upward potential of at least 4% to 7%.

SharpLink Buyback New Flywheel Activation

SharpLink announced a stock buyback plan of up to $1.5 billion in August, which will only be executed when the company’s stock price is below its ETH asset per share net asset value (mNAV of less than 1). This means that the price of ETH will be closely linked to the company's buyback actions, and if the ETH price continues to rise, SharpLink's stock is also expected to benefit from the increase in asset value.

(SharpLink announces a $1.5 billion buyback plan: betting on Ether, challenging traditional financial logic)

Currently, SBET mNAV has been below 1 for a period of time. The company has officially launched a stock buyback plan, with the first round of repurchases totaling approximately 939,000 shares of common stock at an average repurchase price of $15.98, amounting to a total of $15 million. This also signifies that SharpLink has initiated a new flywheel model, using stock buybacks to boost the stock price, raising mNAV above 1, while the stock price being higher than the net asset value per share of ETH is beneficial for issuing new shares to buy ETH. Chain News has visualized it as follows.

mNAV is still below 1, does the official guarantee the stock price floor?

According to SharpLink official data

ETH Holdings: 837,000 coins

Average cost: 3,603 USD per Ether

baseic mNAV: 0.93

fully diluted mNAV: 0.96

After the first wave of share buybacks, its mNAV remains below 1, indicating that the company still has the motivation to repurchase its stock. Considering the first round of repurchase amounting to 15 million USD, the company still has a quota of 1.35 billion USD to execute. As long as the mNAV does not rise above 1, SharpLink seems unwilling to issue new shares to buy ETH, but is committed to repurchasing stocks. This financial operation model can also be seen as an innovation by DAT. Although MicroStrategy (Strategy) and BitMine have both stated that they would consider stock repurchases when mNAV is below 1, since this condition has not been met, SharpLink should be the first company to implement this model.

The company's guarantee to repurchase shares seems to set a lower limit for the SBET stock price, and whether it can restore investor confidence is worth observing. SBET rose 6.51% yesterday, closing at $16.69. According to official data, its stock price still has at least a 4% to 7% upside potential.

This article discusses SharpLink's new buyback of the flywheel, mNAV is still below 1, and the official guarantees the lower limit of SBET? First appeared in Chain News ABMedia.