GameStop Soars on Building NFT Trading Hub, Crypto Partnerships

GameStop Corp’s plans to expand its non-fungible tokens (NFTs) marketplace and partner with crypto firms boosted the video game retailer’s shares by 17.5 percent in premarket trading and also lifted other meme stocks.

GameStop shares have been languishing for a while, like several other meme stocks, as interest from retail investors dwindled. The lot, which coordinated on online forums such as Reddit to talk up the shares and hurt bearish hedge funds, was responsible for massive gains in the stocks in early 2021.

GameStop is building an online hub for trading NFTs for virtual game collectibles and is close to signing partnerships with two crypto companies to help develop games on blockchain and NFT technology, according to a media report.

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

Other stocks favored by small-time investors – Koss Corp and Bed Bath & Beyond – rose 4.5 percent and 2.2 percent, respectively, while AMC Entertainment Holdings Inc advanced 5 percent.

The highly volatile crypto assets have cratered in recent months, with bitcoin plummeting to a more than three-month low of $42,218.84, down 38 percent from its $69,000 all-time high in November.

Ether, used to buy NFTs, has slumped to $3,225.79, 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,” Mirabaud analyst Neil Campling said.

Another gainer on the NFT news was Switzerland’s cybersecurity firm Wisekey International Holding that rose 6.8 percent after announcing plans to launch an NFT from space on Jan. 13.

(Reuters)