GameSquare Unveils $100M Ethereum Treasury with 14% Yield Potential
GameSquare Launches $100 Million Ethereum Treasury with Ambitious Yield Goals
GameSquare’s Strategic Initiative
GameSquare has announced an ambitious plan to establish a $100 million treasury in Ethereum, aiming for a yield between 8% and 14% through a decentralized finance (DeFi) approach. This announcement has led to a significant surge in the company’s stock, which rose nearly 60%.
In a press release dated July 8, the company revealed it has initiated an underwritten public offering of 8,421,054 shares at a price of $0.95 each. This offering is projected to generate around $8 million in gross proceeds, excluding underwriting fees and other associated costs.
The Minneapolis-based company intends to utilize these funds to launch its Ethereum treasury strategy, which promises higher returns compared to the typical 3% to 4% yields from standard ETH staking.
Leadership Insights
GameSquare’s CEO, Justin Kenna, expressed confidence in the initiative, stating, “This announcement showcases the trust of a distinguished group of investors and leaders in the DeFi space.” He elaborated that this strategy will enhance the company’s financial flexibility and support a clear plan for capital allocation, which includes acquiring more ETH, funding potential share buybacks, and reinvesting in growth opportunities.
The treasury initiative will be bolstered by a partnership with Dialectic, a firm specializing in crypto capital management. Dialectic employs machine learning and robust risk management techniques to optimize returns. Additionally, Lucid Capital Markets is acting as the sole underwriter for this offering.
Kenna further explained, “By collaborating with a leading crypto investment firm, we aim to generate substantial on-chain yields while enhancing our knowledge in decentralized finance, exploring new revenue avenues, and fortifying our balance sheet.”
Diversification of Treasury Strategies
GameSquare’s treasury may also explore various yield-generating options within the Ethereum ecosystem, including the use of stablecoins and NFTs to broaden and enhance returns. Following the announcement, the company’s stock price experienced a notable increase, opening at $0.99, reaching a peak of $1.69, and ultimately closing at $1.54.
Growing Interest in Ethereum Among Corporations
The news from GameSquare coincides with similar moves by other firms in the industry. SharpLink Gaming, recognized as the largest corporate holder of Ethereum, recently added 7,689 ETH, valued at approximately $19.2 million, to its holdings. This brings its total ETH reserves to 205,634, which the company has committed to staking and restaking protocols.
SharpLink has also introduced a new metric, ETH Concentration, which has seen a 19% increase in the last three weeks.
Several other companies are also pivoting towards Ethereum-based strategies. Bit Digital has disclosed its transition to Ethereum for its treasury, accumulating over 100,000 ETH following a $172 million public equity raise and the sale of 280 BTC. CEO Sam Tabar emphasized that this shift reflects a long-term commitment to the cryptocurrency’s programmable capabilities and staking yield model, asserting it as the future of digital assets.
