GameStop’s stock is up more than 30% after the company closed its market today, but there’s a reason why. In a short after-hours period, the company’s stock value increased over 30%, reminiscent of the “meme stock” rally of last January. In this article, we’ll examine why GameStop is making a smart move by preparing for the NFT marketplace and exploring emerging opportunities in Web 3.0 gaming, blockchain, and NFTs.
GameStop stock is higher after frontloading inventory prepping for NFT marketplace
GameStop stock is up more than 30% in after-hours trading following news that the company received a subpoena from the SEC regarding trading activity connected to the 2021 fiscal year. The report establishes that positive investor sentiment drove the stock’s increase. The stock’s gains were driven by positive sentiment and professional traders scrambling to cover short positions.
Last month, GameStop launched its digital asset wallet, which allows users to store, send, and receive cryptocurrency and NFTs. The app has gained widespread downloads and a five-star rating in the Chrome store. In Q2, the digital asset wallet will enable GameStop customers to use it for transactions on its NFT marketplace. In the meantime, investors remain positive about GameStop’s NFT strategy and its future prospects.
GameStop’s business model has become outdated
For years, GameStop has been a staple in the gaming community. This retail chain has been a source of controversy, with employees complaining about working conditions. In recent years, the company has felt the impact of the digital age, as people have increasingly been turning to downloads and direct purchases from game distributors. Its business model has changed, too. GameStop is expanding its product line and diversifying its revenue sources to adapt to the changing marketplace.
While GameStop’s business model has become increasingly outdated, the company has made some questionable decisions in recent years. One of these decisions has been to introduce unrelated sales items such as preowned games. This strategy has failed. In addition to that, the company has seen its profit margins decline, and sales have declined in nearly every department. Still, GameStop’s business model is fundamentally flawed. While the company relies heavily on trade-ins to generate revenue, it has become increasingly difficult to attract customers. As a result, the company has struggled to adapt to the digital age.
GameStop is exploring emerging opportunities in blockchain, NFTs and Web 3.0 gaming
GameStop has been busy working on a new business model for a while. Previously, the company relied on retail sales to support its financial results. Now, it wants to enter the growing Web 3.0 market by frontloading its inventory into digital assets. This will likely result in higher revenue for the company. Investors can expect the company to unveil new pacts with cryptocurrency groups.
Analysts expect the NFT market to grow at a CAGR of 30-60%. And with Gamestop’s plans to create new use cases and innovate with this tech, the company is poised for explosive revenue growth. Insiders and institutional ownership are climbing. Several high-profile tech executives are resigning to join the company. This suggests that investors are confident about the company’s future.