GameStop launches new NFT marketplace, shares surge

GameStop just created an NFT marketplace. The marketplace allegedly generated roughly $2 million in sales volume, which translates to less than $50,000 in transaction fee income on the first day, so the response wasn't very enthusiastic. Even if daily volumes have declined over the course of the following days, the debut was far from catastrophic, especially in light of the setbacks experienced by rival startup exchanges like Coinbase NFT.

GameStop is looking for a business sector that will generate income and lessen its dependency on physical store sales. The timing could have been better for the company given that NFT dollar volumes have plunged as crypto prices have fallen, according to TechCrunch.

In the first half of the year, GameStop's (GME 3.99%) stock fell alongside the overall market, falling roughly 18%. The popular meme stock experienced a 31% decline as a result in the second half of the previous year.

But in July, GameStop stock has recovered, rising 15% in the first half of the month, partly as a result of investors' excitement over a planned stock split and the opening of the business's long-awaited NFT marketplace.

The GameStop marketplace is being launched on a layer-2 of Ethereum, a secondary network that handles most of the data processing but still depends on the mainnet Ethereum to store data on a blockchain. Most secondary NFT sales take place on the Ethereum or Solana blockchains.

Vitalik Buterin, the inventor of Ethereum, strongly supports this idea of modular blockchains, but it complicates matters because it requires cryptocurrency investors to unite behind a new network because there are numerous layer-2 choices.

GameStop announced a four-for-one stock split on July 6 which will take effect later this month.

Before the news of the stock split, the price of GameStop shares was approximately $120. Additionally, its main line of business is in disarray. While sales were up 8% year over year, they were down 11% from Q1 2019 in the last quarter. In addition, GameStop lost almost $300 million in cash and reported a net loss of $158 million. A day after disclosing the stock split, the business sacked CFO Mike Recupero and warned staff members that there will be layoffs.

The stock split appears to be an attempt to pique investor attention and support GameStop shares in the short term, though. After a significant run-up in the stock price fueled by strong sales and/or earnings growth, firms frequently employ stock splits to offer shares' accessibility to individual investors.

GameStop quickly rose to prominence as one of the largest NFT markets, with sales of its top 50 collections totaling nearly $3.5 million in just 48 hours.

According to Motley Fool, it is understandable why this excited GameStop stockholders. Despite outperforming the majority of other NFT platforms including market leader OpenSea, continue to be larger than GameStop. In any case, this year has seen a free decline in the NFT sector.