Keith Gill was one of the main forces behind the surge in “meme stock” GameStop in January 2021.SOPA Images/Getty Images
GameStop surged 20% in premarket trading after a report said its planning an NFT marketplace. The Wall Street Journal also reported that GME is close to signing two crypto partnerships. Reddit forum WallStreetBets rejoiced and many users anticipated a repeat of last year’s meme-stock mania. GameStop stock soared 20% in premarket trading after a report said the games retailer plans to create a marketplace for non-fungible tokens, or NFTs, and is close to sealing cryptocurrency partnerships.
The company has hired more than 20 people to oversee the NFT unit as it tries to turn around its business, the Wall Street Journal reported Thursday, citing people familiar with its plans.
GameStop (ticker GME) surged 19.82% in premarket trading to $157 on Friday, having rocketed as much as 29% in after-hours trading.
The move caused huge excitement on the WallStreetBets Reddit forum. Traders there sent shares in GameStop — one of the original “meme stocks” — soaring in January of 2021, whacking hedge funds that had been betting against the company.
“GME is back on the menu boyz,” ran the headline of one forum post on the topic Friday.
“I wasn’t here last January, and I sure as f*** ain’t missing this January,” one user wrote. “Back in play, roll the dice folks,” said another.
GameStop’s move into NFTs would bring together two strands that dominated retail investing in 2021: meme stocks and crypto-mania.
Non-fungible tokens — crypto collectibles or art written onto the blockchain — soared in popularity last year, becoming a $40 billion market. One NFT, an artwork by the artist Beeple, sold for a record $69 million in March.
Other meme-stock names such as AMC have also investigated crypto projects, in a probably attempt to appeal to the retail traders who became so enamored with their companies last year.
Read more: Amateur traders, Reddit apes, and meme lords trounced Wall Street for 2 years. But in 2022… the big shots are going to strike back.
The WSJ reported that GameStop is building an online marketplace for buying and selling video-game focused NFTs such as weapons and avatar outfits. Grapevine, Texas-based company is also close to reaching deals with two digital-asset partners to invest in crypto games, it said.
Although irony and nostalgia lay behind much of the meme-stock mania of 2021, many retail and institutional investors see potential in GameStop, given the popularity of gaming.
Activist investor Ryan Cohen took over as chairman last year and has been trying to turn the company into a more modern, tech-savvy firm.
Nonetheless, GameStop reported a loss of $105 million in the third quarter. Its stock is down around 30% over the last six months.
Yet the company’s poor financial performance may not be enough to deter retail investors when trading opens Friday. “I’m getting the good kind of flashbacks from a year ago,” one WallStreetBets user posted.
GameStop did not respond to a request for comment.