Meme stock darling GameStop soars on reports it will launch an NFT marketplace
GameStop Corp. plans to launch a marketplace for nonfungible tokens for gamers by the end of the year, according to a person familiar with the matter, sending shares of the beleaguered gaming retailer soaring in extended trading.
The company, which is in the midst of a turnaround to focus on digital sales rather than brick-and-mortar shops, is also in talks with crypto and blockchain companies about which tokens could be used on the NFT marketplace, the person said, asking not to be named discussing details that aren’t yet public.
It’s also discussing with partners the potential for creating a number of funds, of up to $100 million each, to invest in NFT content creators and gaming companies. Over the last few months, GameStop has assembled a team of more than 20 people that are focused on the crypto-related push, the person said.
The Wall Street Journal earlier reported on GameStop’s crypto and NFT plans. The shares jumped 29% in extended trading.
Investors have been waiting for months to hear more about GameStop’s strategy from Chairman Ryan Cohen, the co-founder of pet supply company Chewy Inc. who joined the board earlier this year with a vision to revive growth. The Grapevine, Texas-based company suffered in the shift from gaming cartridges to digital downloads, and was further battered by the COVID pandemic which shuttered retail shops. But it has been championed by retail investors who organize in online forums like Reddit and boosted the stock by almost 700% last year, despite little fundamental evidence to support the gains. The company has posted years of annual revenue declines.
The largest market for NFTs, OpenSea, has seen an explosion in sales this year, with monthly sales volume peaking at $3.4 billion in August, up from $96.7 million in February, according to Dune Analytics. The company makes money by taking a 2.5% cut of every transaction. Seeing this traction, a slew of other NFT marketplaces have sprung up in recent months, hoping to attract users. GameStop already has a stable of millions of loyal gamer fans whom it can direct into its own marketplace.
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