Without a doubt, GameStop ($GME) was a huge part of 2021, kick-starting a “meme stock” trend that saw many amateur investors hopping on the bandwagon.
The craze sent the stock prices soaring. At its peak, GameStop managed to hit a record of US$325 per stock with a US$22.6 billion market cap.
The biggest meme stock of the century is now back in the spotlight as it just launched its very own NFT marketplace.
Before we dive into that, let’s get the basics sorted.
What is GameStop?
Started back in 1984, GameStop is a gaming merchandise retailer that sells games, consoles and other electronics.
GameStop wasn’t doing very well in general because it faced stiff challenges from digital distribution services like Steam.
The 2020 pandemic added oil to the fire as the revenue plunged to a new low and it saw a 21% decline from the previous year.
This caught the eye of multiple hedge funds and they all open a short position in an attempt to profit from the potential downfall of Gamestop.
Users of the subreddit r/wallstreetbets saw this as a golden opportunity to short squeeze these hedge funds. They banded together and started buying to initiate the short squeeze.
The Reddit traders were hugely successful and many hedge funds were either liquidated or forced to close their position at a massive loss.
Many ended up closing shop and the largest short seller, Melvin Capital, lost almost 50% of its capital.
GameStop x Immutable X
Earlier this year, GameStop partnered with Immutable X to launch its very own NFT marketplace.
Immutable X (IMX) is a layer 2 scaling solution for NFTs on Ethereum. It enables users instant transaction confirmation in a near-zero gas fee environment.
The partnership granted GameStop more than 56.2 million IMX tokens, worth more than US$150 million.
GameStop then proceeds to dump the token in three different exchanges. On-chain data showed that GameStop sold US$30 million worth of IMX across Huobi, OKex and Binance.
GameStop just launched their long-awaited NFT marketplace. While there was mixed reception within the community, sales volume easily surpassed US$4 million in three days.
It only took GameStop NFT marketplace 2 days to surpass what Coinbase NFT marketplace did since its inception.
The non-custodial marketplace is built on Loopring and it allows users to bridge funds seamlessly from the marketplace website. Currently, the marketplace takes a 2.25% commission fee with every NFT sale on the platform.
While still in its beta stage, it is by far a very successful project than many expected. It will be interesting to see how GameStop build on the current hype and how it will onboard new users to its platform.
[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
Featured Image Credit: Chain Debrief