Type to search

GameStop Jumps on News of NFT Trading Hub, Crypto Pact

GameStop stock rallied on Friday after a report that the videogame retailer plans to expand its non-fungible tokens (NFTs) marketplace and partner with crypto firms.


GameStop shares rallied on Friday after a report that the game retailer plans to expand its NFT marketplace and partner with crypto firms. File photo: Reuters.

 

GameStop Corp’s stock rallied on Friday after a report that the videogame retailer plans to expand its non-fungible tokens (NFTs) marketplace and partner with crypto firms.

The company’s shares soared last year as it was at the centre of a battle between small investors coordinating on online forums and Wall Street hedge funds that had taken short positions. Since mid-November, its stock has mostly declined.

On Friday, GameStop jumped 7.3% to $140.62 after reports late on Thursday that the company would build an online hub for trading NFTs for virtual game collectibles and establish cryptocurrency partnerships.

GameStop’s plans were reported by the Wall Street Journal and confirmed by a source. The company declined to comment on the reports.

NFTs, which use blockchain to record the ownership of digital items such as images and videos, surged in popularity in 2021, leaving many confused about why so much money was being spent on copiable digital items that do not physically exist.

Highly volatile crypto assets have tumbled in recent months, with bitcoin plummeting to a more than three-month low of $42,001.97, down about 38% from its $69,000 all-time high in November.

Ether, used to buy NFTs, has slumped to $3,219.77, levels last seen in early October.

“Meme stocks are speculative rather than fundamental and, to a degree, cryptos are also little speculative in nature … too much of an exposure to cryptos could have an effect on the balance sheets of these companies,” warned Mirabaud analyst Neil Campling.

Short selling against GameStop increased by about 1 million shares to 8.4 million in the past 30 days, now worth $1.11 billion and equivalent to 13% of GameStop’s free float, according to data from S3 Partners.

Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, said Friday’s share move was unlikely to be a short-covering rally.

“First we would need to wipe out recent mark-to-market profits on the short side, which means getting back to levels in the $170 – $200 stock price range,” for a short squeeze to happen, Dusaniwsky said.

 

• Reuters with additional editing by Jim Pollard

 

ALSO SEE:

 

Yellen hails resilience of financial markets in GameStop turmoil

 

GameStop shares double on renewed retail buying

 

Art That Doesn’t Really Exist Attracts Huge Sale Prices as Buyers Flip NFTs

 

The Disruptive Strategist – crypto, NFTs and blockchain

 

 

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

logo

AF China Bond