If held by a Sharpedo, the Sharpedonite allows it to Mega Evolve into Mega Sharpedo if its Trainer has a Key Stone. A Trainer can only Mega Evolve one Pokémon per battle (or only have one Mega-Evolved Pokémon at any given momentZA).
As a Mega Stone, it is unaffected by item-negating effects (such as Embargo and Klutz). Item-manipulating effects (such as Trick and Fling) cannot give or remove a Sharpedonite from Sharpedo.
Outside of battle
If held by a Sharpedo, the Sharpedonite allows it to Mega Evolve into Mega Sharpedo when it performs a Spectacular Talent during a Pokémon Contest Spectacular if its Trainer has a Key Stone. Sharpedo will remain a Mega Sharpedo until the Talent Round ends.
Adds one more Mega Sharpedo above the match. Actually converts the tiles directly above all other Mega Sharpedo into a Mega Sharpedo. This effect can replace any disruption in the tile above and counts as erasing the content of the tile for damage, but does not affect black-cloud disruptions. Does nothing if the above tile is empty.