Just when you thought that the GameStop saga couldn’t get any weirder, it goes and confirms that it’s working on an NFT platform.
Five months on from its infamous short-squeeze in January, GameStop (NASDAQ: GME) isn’t going away.
In fact, the ‘gaming’ company is doubling down and just embracing its newfound meme-stock status, it seems.
“But should I buy GameStop?”
Not touching that one with a ten-foot pole, but I can explain just why GameStop is at the top of headlines once more today.
You all know what NFTs are by now, right? Non-fungible tokens, or digital assets that represent real-world objects like art, music, in-game items, and videos.
Anyway, GameStop tried (and failed) to very subtly confirm on Tuesday that it was getting into the NFT business. The gaming retailer is building a team of engineers, designers, gamers, marketers, and community leaders to help build an NFT marketplace based on the Ethereum blockchain platform. Ethereum is the world’s second-largest crypto asset.
While it might seem crazy that what is essentially a retail store is now delving into the vastly misunderstood digital assets space, GameStop does have some business being here.
GameStop actually has a relatively successful collectibles business, selling all manner of sought-after physical items, from trading cards to Pop! figurines. In 2020, the company recorded almost $600 million in collectibles revenue, up 11.4% on the year before. With collectibles and NFTs currently trending, it is a ‘somewhat’ logical move, and one that GameStop can afford, having eliminated all of its long-term debt as of May 3.
It is still early days yet, but if GameStop can get past:
- its 12 million± shortsellers;
- its lack of profitability;
- the retail apocalypse;
- the fact that it is so overvalued it makes Shopify look cheap;
- or the completely unstable and fad-like nature of digital assets;
then maybe, just maybe, it could actually turn things around and become a stable and profitable business in the coming years.
MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.