On Thursday, April 22, 2021, a person wearing a protective mask came out of a GameStop Corp. store in a mall in San Diego, California.
Soldier | Bloomberg | Getty Images
After news that the video game retailer plans to create a market for irreplaceable tokens or NFTs, GameStop’s stock price will record double-digit gains on Friday.
Speculative stocks soared more than 16% before the market. In 2022, the stock price is down nearly 12%, which is more than 70% down from its 52-week high.
The Wall Street Journal reported on Thursday that GameStop may enter the NFT field. A source close to the situation confirmed the plan to CNBC, saying that the plan has been in progress for several months.
According to sources, GameStop also plans to establish a cryptocurrency partnership to create games and items for the market.
“GameStop is in a very unique position because many of these NFT projects are starting to add game utility behind the NFT,” said NFT investor and creator of the “Hungry Wolf” NFT series, Adam Hollander. “In my opinion, GameStop is in a good position to use the hundreds of millions of people they own to play video games, and these people least consider GameStop to be a reliable brand.”
According to sources, the company has been quietly recruiting talents in the field of blockchain and encryption. There are currently more than 20 members in the team.
NFT uses a technology that allows the proof of ownership of digital goods to be stored on the blockchain, usually Ethereum. It has always been one of the most hyped industries in technology. The most famous NFT market, OpenSea, was recently valued by investors at USD 13.3 billion.
According to the Wall Street Journal, GameStop’s market will focus on virtual video game merchandise, such as character costumes and weapons.
In January 2021, retail traders joined forces on Reddit’s WallStreetBets forum to raise GameStop’s stock, which was heavily shorted by hedge funds. Retail buying triggered massive short-covering by hedge funds, further boosting the rally.
After a year of frantic trading, the stock rose 687% at the end of 2021. Some investors are disappointed by the lack of a specific transformation plan for its e-commerce transformation, which is led by activist investor and Chewy co-founder Ryan Cohen.
— CNBC’s Frank Holland provided reporting.
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