GameStop (GME) has announced a partnership with FTX US as part of Ryan Cohen’s stategy shift to NFTs. As NFT sales are recently falling? Do you think this move will be good for GME, which is down 37% YTD?
GameStop Corp. shares were up on Thursday after the video game retailer announced a partnership with FTX US, suggesting the company is making strides in its strategy shift to nonfungible tokens. But analysts were still skeptical about the longterm growth prospects after the company reported a decline in sales and a wider loss in the second quarter.
GameStop said Wednesday it will collaborate with FTX US, on new e-commerce and online marketing initiatives, and will begin carrying FTX gift cards in select stores. The financial terms of the partnership weren’t disclosed. GameStop shares, which are down 35% this year, rose about 7% in premarket trading.
The agreement builds on GameStop’s earlier forays into NFTs, including the launch in June of a digital asset wallet to allow gamers to store, send and receive NFTs. In July, the company rolled out an NFT marketplace to trade those assets, despite the fact that sales of such digital artworks have declined amid the industry crash.
The pivot to NFTs has yet to show up GameStop’s results. Net sales declined 4% to $1.14 billion in the fiscal second quarter, the company said in a statement, falling short of analysts’ estimates. The company’s net loss nearly doubled to $108.7 million.
The bulk of GameStop’s business remains in a state of “extreme secular decline,” and investors shouldn’t fall for the company’s “endless series of gimmicky announcements,” analysts at Vital Knowledge wrote in a note to investors.
Chairman Ryan Cohen has been pushing GameStop into NFTs in an effort to turn around the fortunes of the beleaguered gaming company, which hasn’t seen a quarterly profit since the end of 2021. Cohen, who also founded pet e-commerce site Chewy Inc., has seized on gamers as being among the NFT industry’s biggest target audience.
Submitted September 08, 2022 at 02:55PM by predictany007
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