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• GameStop’s investments in the crypto sector turned out to be a loss
• GameStop no longer owns crypto tokens
• Focus on key areas announced
What do cryptocurrencies and GameStop stocks have in common? Both had a brilliant rally in 2021 and were not just the focus of investors, but of the general public. But in 2022, not only Bitcoin, Ethereum & Co., but also GameStop’s share has been steadily declining. Media interest has also declined significantly recently. Bitcoin is now trading at a current price of $17,707 (as of December 14, 2022), down 75% from its all-time high of $68,925 on November 10. GameStop stock, which currently costs $21.05 (at the closing price of December 14, 2022), has moved even further away from its intermediate high: on January 28, 2021 – that is, in the middle of the same Hypes stock market – it had peaked at $120.75.
GameStop: targeted recovery is slow
2022 is not an easy year for GameStop: although there are promising signs of a sustained upward trend, the company continues to rack up significant losses. In the third quarter, GameStop posted revenue of $1.186 billion, down $111 million from the same period last year ($1.297 billion). After all, losses have come down – from US$105.4 million the previous year to US$94.7 million recently.
GameStop shares also fell significantly following the overall disappointing fundamentals, but at least the stock is trading well above where it was before the January 2021 hype. GameStop is still hard at work. foot on the turnaround: the obsolete, stationary game store that is on the verge of bankruptcy must become a future-oriented digital model company. But at least when it comes to the crypto sector, GameStop has obviously made a mistake and is therefore changing its strategy.
Investments in crypto have been significantly reduced
For example, GameStop CEO Matt Furlong announced on the Dec. 7 earnings call that the video game retailer had “proactively minimized exposure to cryptocurrencies” over the past few months. GameStop currently has “no significant token inventory”. Furlong adds, “While we continue to believe in the long-term potential of digital assets in the gaming world, we do not and will not risk significant shareholder capital in this space.” This represents a departure from the video game retailer’s strategy of profiting from the supposed growth market for NFTs, blockchain technology, Web3 applications and internet currencies by investing millions.
GameStop released NFT market and cooperated with FTX
Earlier this year, GameStop celebrated the crypto industry as “increasingly relevant to gamers of the future,” according to “Cointelegraph.” GameStop followed these announcements with actions and launched various crypto projects. Of particular note is GameStop NFT Marketplace, which launched on October 31 on ImmutableX, an Ethereum Layer 2 blockchain. The company previously launched a self-custodial beta cryptowallet in May and an NFT beta marketplace on Loopring (a layer 2 protocol based on Ethereum) in March. From today’s perspective, GameStop’s partnership with now bankrupt crypto exchange FTX was particularly piquant. The goal of the cooperation was to attract more customers to cryptocurrencies and to work together on e-commerce and online marketing initiatives. GameStop ended its relationship with FTX on November 11, shortly after filing for bankruptcy.
Planned focus on key areas
But GameStop’s investments in the crypto sector proved extremely costly and put the company into the millions. Now GameStop is taking the toll and reducing its crypto exposure. Even if the American company does not give an exact overview of the latest waves of layoffs, these are likely to affect the crypto sector in particular. Going forward, GameStop wants to focus on its core areas instead. As the company’s latest figures show, it’s hardware and accessories with sales of US$627 million, followed by software (US$352.1 million) and collectibles (207 million). .3 million US dollars).
However, GameStop will likely continue to pursue blockchain initiatives.
However, the reduction in investment does not equate to a complete and definitive exit from the crypto sector: GameStop wants to continue to pursue “other business and strategic initiatives related to digital assets and blockchain technology”, according to a report sent at the US SEC. deposit report. The extent to which these will continue to be pursued with heavy pressure will also depend on the future development of blockchain, digital currencies, NFTs and Web3 applications. If the crypto winter is followed by a spring awakening, GameStop’s engagement could actually increase again.
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