Yahoo Finance’s Ines Ferre examines the market action surrounding GameStop and AMC after the meme stocks announce engagements with the NFT and cryptocurrency trading spaces.
KARINA CONTRERAS: One of the stocks that has been doing well today however, trading in the green is GameStop. It saw a spike today, up now by about 3% but was up by about 20% to start the day. And that is on the news that the retailer is planning to create a marketplace for NFTs. And here with more on the move is our Yahoo Finance’s Ines Ferre. How well-positioned is GameStop to do this?
INES FERRE: Well, it’s something that GameStop has hinted at before in the past, Karina. And “The Wall Street Journal” is reporting that the company has hired more than 20 individuals, people to run this unit that will create this marketplace for NFTs. And it’ll be a marketplace where they will sell video games, virtual goods, such as avatar, clothing, weapons, that type of thing.
Also, “The Wall Street Journal” reporting that the company is working on a couple of relationships with some crypto companies. Now, this is, as I said, something that they have talked about, although very briefly, in the past. In fact, last year in December during their very brief earnings call, CEO Matt Furlong had said that GameStop was exploring opportunities when it came to NFTs, blockchain technologies, and also web 3.0.
And I should add also that internet sleuths have noticed that last year, the company was posting these job openings that included the description of NFT, web 3.0. And if you go to NFT.GameStop.com, you’ll notice that the company is also soliciting creators for their NFT platform.
Now, there are three analysts right now that cover GameStop, one of them being Michael Pachter from Wedbush Securities. He has an underperform rating and a $45 price target on the stock. He says he believes in NFTs, but he doesn’t think that it will work for GameStop because the publishers won’t allow it. Take a listen.
MICHAEL PACHTER: NFTs can only be resold if the publishers allow them to be. The terms of service on digital assets are that they cannot be resold. They are licenses to use them on a single device. There was a US Supreme Court case called Autodesk that settled that. So the publishers are really going to be reluctant to let anybody trade NFTs unless they control the transaction and they capture the lion’s share of the profit. And so I don’t even see a role for GameStop.
INES FERRE: Now, we did reach out to GameStop. And we have not heard back from them to see if they were effectively launching this NFT platform. But again, they’ve talked about this direction in the past before. But this report, this leak to “The Wall Street Journal” really, is something sort of significant because there have been such few details about the turnaround strategy for the company.
Chairman Ryan Cohen has put in his people at the C-suite just last year in 2021. And he has talked about a strategy going forward but has given very few details about it. So any bit of information, any little bits of information that investors can get a hold of is certainly good news for them, as the company is going through this turnaround strategy.
ALEXIS CHRISTOFOUROS: And you know, Ines, certainly, it’s not the only sort of meme stock that’s finding its footing in the NFT world. I know AMC also got a lift. The cinema company looking at jumping into NFTs as well. What can you tell us there?
INES FERRE: Yeah, that’s right so. AMC is already also in the NFT world. The company put out a Spider-Man NFT. Also has an NFT for its shareholders. It’s a gold coin that says “I own AMC.” So CEO Adam Aron has certainly leaned into this whole NFT world and also has leaned into crypto. In fact, just yesterday he was tweeting that the company is in line to be able to accept Dogecoin and Shiba Inu, some of the meme tokens, that users have been clamoring for AMC to start accepting.
They’ve already gone in the direction of Bitcoin, of Ethereum. But now they’re going to be delivering this in the first quarter of this year, where they’ll be able to accept Dogecoin and Shiba Inu, probably in March, as Adam Aron has said. So certainly, AMC also going in this direction as well.
And these stocks kind of going in the same direction as well. So we saw AMC yesterday in after-hours surging after this report from “The Wall Street Journal” about GameStop. GameStop also surging in after-hours yesterday. Today, both of these stocks paring back some of those gains.
KARINA CONTRERAS: I wonder how much some of the meme stock, Reddit, and Wallstreetbets crowd jumps on to this and then we see another spike higher for GameStop.
INES FERRE: Yeah, that’s right. I mean, look, it’s been a very, very volatile– these stocks have been very volatile. And in fact, I’m going to pull up the interactive board right now so you can just take a look. You can see NCF more than 1%, GameStop up more than 1%.
But let’s take a look at a two-month chart. You can see here that these speculative stocks, AMC down 45% over the last two months, GameStop down 37% over the last two months. But look, if you go on Reddit, if you go on any of these platforms where you can look at what AMC apes and GameStop apes are saying, they’re “hodlers.” They are holding this for the long run.
KARINA CONTRERAS: OK, thank you so much for that report, Ines Ferre.
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