GameStop soared by 22% on the background of the news about creating an NFT division
GameStop (GME) video games in 2021 showed an increase of 3000%, but the company’s sales continued to decline steadily. Now GameStop is entering a new market of NFT products with excellent growth potential, shares of the American retailer GameStop soared by 22.68% after the end of the leading trading, to $160.75 per security, amid news about the creation of its own NFT division.
They buy the trading data of the New York Stock Exchange. At the same time, at peak values, the growth of the company’s quotations reached almost 33% — immediately after the article’s publication in the American Wall Street Journal, GameStop shares were trading at $174.2 per security. According to the magazine, GameStop intends to create its online center for the purchase, sale, and exchange of NFT-goods for computer games, among which may be, in particular, clothing for characters and weapons.
For the start of development, the company has already begun negotiations with leading gaming companies and publishers and has also hired 20 people to manage a new division. The launch of virtual goods trading may occur as early as the end of this year.
In addition, it became known that GameStop is negotiating with unnamed companies in the field of cryptocurrency to sign partnership agreements aimed at technology exchange and joint investments in the booming blockchain and NFT industries. According to sources of the publication, in 2022, the retailer intends to sign similar agreements with dozens of crypto companies and invest tens of millions of dollars in them.
Analysts interviewed by the WSJ believe that computer games can become one of the main drivers of the development of the blockchain industry in general and NFT trading in particular since gamers already spend large sums on buying virtual goods. In addition, several major game developers, such as Ubisoft, Zynga, and Square Enix, have announced plans to develop similar digital products.
At the beginning of 2021, GameStop securities showed a sharp increase — only by the end of January, the company’s shares rise 17 times. The main version of the growth was the massive closure of short positions on paper due to the actions of investors agreed on the Reddit platform, as a result of which investors dubbed the company’s securities “meme.” According to trading data, from March 11, 2020, to December 27, 2021, GameStop shares rose by 3482.4%. However, this did not save GameStop from a weak quarterly report.
GameStop’s net loss for the third quarter of 2021 increased to $ 105.4 million and $ 1.39 per share compared to $ 18.8 million or $0.29 per share for the third quarter of 2020. Revenue for the quarter was $1.297 billion and increased by 29.05% year-on-year. According to the retailer itself, the revenue growth was due to the recent partnership with Samsung, LG, Razer, and Vizio.
