GameStop jumps after report on NFT trading hub, crypto pact

A GameStop Inc. Store Encinitas, California, US, shown May 24, 2017. REUTERS / Mike Blake

Shares of Gamestop Corp (GME.N) rose on Friday after video game retailer announced plans to expand its non-fungible token (NFT) market and enter into partnerships with crypto companies.

The company’s stock rose last year as it was at the center of a battle between small investors coordinating online forums and Wall Street hedge funds taking short positions. Since mid-November, its shares have fallen sharply.

GameStop rose 7.3% to $ 140.62 on Friday after the company on Thursday created an online NFT trading center for virtual game storage and cryptocurrency partnerships. A source familiar with the matter told Reuters about Gamestop’s plans, which were reported by the Wall Street Journal.

Gamestop declined to comment on the reports.

NFTs, which use blockchain to record ownership of digital items such as images and videos, have grown in popularity in 2021, leaving many confused as to why so much money is being spent on copyable digital items that physically Does not exist

Extremely volatile crypto assets have plummeted in recent months, with Bitcoin falling to a three-month low of $ 42,001.97, almost 38% below its all-time high of $ 69,000 in November.

Ether, used to buy NFTs, fell to $ 3,219.77, the last time it was seen in early October.

“Stocks are more speculative than basic, and to some extent even cryptocurrencies are not speculative in nature. Excessive exposure to cryptocurrencies can have an impact on the balance sheets of these companies.” Miraboud Neil Kampling, analyst warns. Short sales against Gamestop have risen nearly 1 million shares to 8.4 million in the last 30 days, now at $ 1.11 billion and account for 13% of Gamestop’s free float, according to data from S3 Partners.

Ihor Dusanivsky, managing director of Predictive Analytics at S3 Partners, said Friday’s stock move is unlikely to be a small hedging rally.

“We will first need to erase the recent earnings of the market on the short side, which means a return to the level in the range of $ 170 to $ 200 per share,” Dusanivsky said.

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