Meme stocks hit crypto mania with GameStop tracking NFTs

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    (Bloomberg) – It was only a matter of time before the turbo-charged worlds of meme stock and crypto trading collided in a burst of speculative frenzy.

    News late Thursday that GameStop Corp., which became the symbol of the turbulent year of retail investing in 2021, is getting into the non-fungible token business, caused shares to soar more than 20% after hours before they did gave something back. Shares rose about 6% to $ 138.50 at 10:45 a.m. on Friday in New York. The jump has followed a sharp retreat since late November.

    NFTs emerged as the hottest commodity in the crypto universe over the past year as the prices of some digital works of art skyrocketed and celebrities and athletes flocked to the asset class. GameStop’s flirtation with crypto follows that of the Reddit crowd favorite AMC Entertainment Holdings Inc., who announced in November that it was considering issuing its own cryptocurrency.

    Entering the NFT trading would be the most recent linchpin for Chairman Ryan Cohen, whose urge to reinvent the stationary video game seller into a digital-first dealer sparked a passion for the stock and huge losses over the past year for hedge funds, stocks were empty.

    GameStop moves to NFT marketplace plan as Cohen Maps turnaround

    «The market loves the decision, the ailing company bought some time by dangling NFTs in front of investors,» said Tokyo-based games industry analyst Serkan Toto. “However, I am very skeptical that GameStop can do it on its own. The company definitely needs partners to compete with OpenSea and get video game companies to work together. «

    GameStop’s NFT strategy, first reported in the Wall Street Journal, includes discussions with crypto and blockchain operators about which tokens would be accepted in its marketplace, as well as setting up potential funds of up to $ 100 million each, to invest in NFT content creators and game studios.

    The largest market for NFTs, OpenSea, was valued at $ 13.3 billion in its most recent round of fundraising this week. According to Dune Analytics, the company saw a revenue explosion last year, with monthly volume peaking at $ 3.4 billion in August, up from $ 96.7 million in February. The company makes money by cutting every transaction by 2.5%.

    Following the success of OpenSea, a number of other NFT marketplaces have sprung up in the past few months in hopes of attracting users. GameStop already has a stable of millions of loyal gamer fans that it can direct to its own marketplace.

    The stock-boosting power of crypto was demonstrated earlier this week when Square Enix Holdings Co.’s shares rose 7.5% after the president’s New Year’s letter included plans to develop Metaverse, blockchain, and NFT-based incentives for gamers. This also illustrated the contrast between the market and public reaction, as the developer, whose titles include the iconic Final Fantasy franchise, has been flatly criticized by gamers and industry watchers for its monetization efforts.

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