You may recall this popular meme stocks two years ago that brought a lot of attention to Robinhood (RH) and this other company, GameStop Corp (GME). Trading was starting to become more mainstream for the ordinary user.
This also kept a lot of attention on this stock that was bordering bankruptcy.
Well, GameStop never declared bankruptcy but is currently looking for a resurgence, thanks to the unexpected attention that came with it.
The company is creating a $100 million fund to support game developers and studios that partner with them. And, they are making a play into the Non-Fungible Token (NFT) space at the same time as reported by The Wall Street Journal this past January.
Let’s take a closer look at what the direction of GameStop and what could propel the company into the near future on our Future Tech Watchlist series…
A Struggling Company Reinvented Itself
After the uproar GameStop had in 2021 with Robinhood and meme-stock traders and short sellers, the company has been on a rebound, you might say.
This is an altogether different company than the one which reported closing hundreds of stores on an earnings call in late 2020. The unexpected extra attention, resultant short squeeze, and massive influx of cash facilitated a rebranding and reinvention for the dying video game seller.
And of course, it didn’t hurt that the board chairman Ryan Cohen disclosed a $10.2 million purchase of GameStop stock which came to 9.1 million shares or 12% of shares outstanding. 2021 sales topped even 2020’s strong performance, and the company struck up new relationships with video game industry heavyweights like Alienware, Corsair, and Lenovo.
Now, GameStop has its sights set on the $40 billion blockchain-powered non-fungible token (NFT) space. The company clearly knows where it’s bread is buttered, and I think this is an intriguing move – not to mention a natural one. Video game enthusiasts are, of course, some of GameStop’s best customers, and some of the most avid consumer-owners of NFTs.
The company is creating an NFT wallet – storage, essentially – which will enable users to store, send, and receive crypto and NFTs via their own web browsers. The wallet is even available as an extension for Google’s Chrome browser, as well as the Brave browser. An iOS app is available for Apple iDevices, as well, according to GameStop.
Importantly, the wallet will give its user complete control of their own crypto, because they’ll own their own keys. Remember: not your keys, not your crypto.
To further its NFT plan, GameStop teamed up with Immutable X, a platform for trading Ethereum NFTs. Immutable X allows users to buy NFTs instantly – without the gas fees that come with using cryptocurrencies. This allows GameStop to advertise and offer customers the lowest fees possible.
The plan is for users to be able to mint and sell their own collectibles through GameStop, though Immutable X will essentially run the GameStop NFT marketplace.
So, this is a win-win for both companies, but it will further the transformation of GameStop’s fortunes, from what was once a dying company selling video games in hardcopy to a full-fledged digital entertainment powerhouse, adapted to the changing landscape.
Cheers and good investing,
— Michael A. Robinson
Source: Strategic Tech Investor