GameStop shares surge as a lot as 20% after information it plans to launch an NFT market

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A person wearing a protective mask leaves a GameStop Corp. store on Thursday, April 22, 2021. at a mall in San Diego, California.

Bing Guan | Bloomberg | Getty Images

GameStop stock rose on Friday after news that the video game retailer plans to create a marketplace for non-fungible tokens, or NFTs.

The speculative stock ended the day 7.3% higher after rising more than 20% at the start of the day. Stocks are still more than 70% off their 52-week high.

The Wall Street Journal reported on the possible move of GameStop into the NFT room on Thursday after the bell. A source close to the situation confirmed the plans to CNBC, saying it had been in the works for months.

GameStop also plans to build cryptocurrency partnerships to create games and articles for the market, the source said.

“GameStop is in a very unique position as many of these NFT projects are beginning to add gaming value to the NFTs themselves,” said Adam Hollander, an NFT investor and creator of the Hungry Wolves NFT collection. “I think GameStop is well positioned to take advantage of the hundreds of millions of people playing video games that GameStop least recognizes as a credible brand.”

With more than two dozen members on the team, the company has tacitly hired talent in the blockchain and crypto fields, the source said.

NFTs use a technology that makes it possible to store proof of ownership of digital goods on a blockchain, often Ethereum. It was one of the most hyped sectors in technology. OpenSea, the most famous NFT marketplace, was recently valued at $ 13.3 billion by investors.

GameStop’s marketplace will focus on virtual video toys like character outfits and weapons, according to the Journal report.

In January 2021, retailers worked together on Reddit’s WallStreetBets forum to increase GameStop’s shares, which were heavily shorted by hedge funds. The individual buyers sparked massive short selling of hedge funds, which fueled the rally.

The stock closed 687% after a year of wild trading in 2021. Some investors have been disappointed with the lack of concrete turnaround plans for the transition to e-commerce, led by activist investor and Chewy co-founder Ryan Cohen.

– CNBC’s Frank Holland contributed to the coverage.

Correction: Ethereum is a blockchain. In a previous version the name was misspelled.