GameStop (GME) plans to launch a non-fungible token (NFT) marketplace. The company is teaming up with Immutable X for the launch as it looks to expand its footprint into the burgeoning segment.
GameStop specializes in retail multi-channel video games, consumer electronics, and wireless services.
Immutable X will power the GameStop NFT marketplace as a layer-2 partner. Its layer-2 protocols have already proved to be effective in enabling fast transactions The two companies have also set up a $100 million fund in Immutable X’s IMX tokens.
The funds will support NFT content creators. Immutable X has also agreed to offer up to $150 million in IMX tokens to GameStop once certain milestones are met. According to Reuters, GameStop setting up an NFT marketplace comes on the heels of NFT sales surging to record highs of $25 billion in 2021 compared to just $94.9 million in 2020.
Ascendiant analyst Edward Woo recently reiterated a Sell rating on GameStop and reduced his price target to $23 from $24, which implies downside potential of 76.82%.
The analyst is concerned that the company’s shares will come under pressure due to a weak earnings outlook. He also remains wary of GameStop’s core video game business as hardware sales slow with the installed base maturing.
Consensus among analysts is a Moderate Sell based on 2 Holds and 2 Sells. The average GameStop price target of $34.00 implies 65.74% downside potential to current levels.
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