GameStop jumps after report on NFT trading hub and crypto pact

A GameStop Inc. store is featured in Encinitas, California, United States, May 24, 2017. REUTERS / Mike Blake

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Jan. 7 (Reuters) – Shares of GameStop Corp (GME.N) rallied on Friday after a report that the video game retailer is considering expanding its non-fungible token (NFT) market and partnering with crypto companies.

The company’s shares soared last year as it was at the center of a battle between small investors coordinating on online forums and Wall Street hedge funds that had taken short positions. Since mid-November, its stock has mostly fallen.

GameStop jumped 7.3% to $ 140.62 on Friday after announcing Thursday night that the company would build an online hub to exchange NFTs for virtual game collectibles and establish cryptocurrency partnerships.

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A source familiar with the matter told Reuters about GameStop’s plans, which had been reported by the Wall Street Journal. Read more

GameStop declined to comment on the reports.

NFTs, which use the blockchain to register ownership of digital items such as images and videos, gained popularity in 2021, leaving many people puzzled as to why so much money was being spent on items. digital copies that do not physically exist. Read more

Highly volatile crypto assets have plummeted in recent months, with bitcoin crashing to a more than three-month low of $ 42,001.97, down about 38% from its all-time high of $ 69,000 in November.

Ether, used to buy NFTs, slumped to $ 3,219.77 from levels last seen in early October. Read more

“Stocks themselves are speculative rather than fundamental and to some extent cryptos are also low speculative in nature… too much exposure to cryptos could have an effect on the balance sheets of these companies,” the Mirabaud analyst warned. Neil Campling.

Short sales against GameStop have increased from around 1 million shares to 8.4 million in the past 30 days, now worth $ 1.11 billion and equivalent to 13% of GameStop’s free float, according to data from S3 Partners.

Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, said Friday’s stock move was unlikely to be a short-lived rally.

“We would first need to erase recent marked-to-market earnings on the short side, which means reverting to levels between $ 170 and $ 200,” for a short squeeze to occur, a said Dusaniwsky.

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Reporting by Medha Singh and Shashank Nayar in Bangalore; Additional reporting by Noel Randewich in Oakland, California; Editing by Shinjini Ganguli, Aditya Soni and David Gregorio

Our standards: Thomson Reuters Trust Principles.

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