Shares of GameStop skyrocketed in after-hours trading Thursday after a report laid out some of the company’s plans to build out a division to buy, sell and trade the buzzy digital collectibles known as non-fungible tokens, reversing recent losses for last year’s hit meme stock as the brick-and-mortar game seller doubles down on the cryptocurrency space to help mint a turnaround.
Grapevine, Texas-based GameStop has hired more than 20 people to help build an online marketplace to trade NFTs of virtual games, a source familiar with the matter confirmed to Forbes after the Wall Street Journal first reported the plans on Thursday.
GameStop shares skyrocketed more than 31% to $173 in after-market trading within minutes of the report, the highest levels in nearly a month after the stock fell victim to a broad sell-off sparked by the Federal Reserve on Wednesday.
The company also plans to partner with game developers and publishers to list NFTs—of everything from avatar outfits to weapons—on its platform.
GameStop, which raised more than $1 billion from investors last year, has previewed the move before, launching a GameStop NFT page on its website in May and linking to an Ethereum address (the blockchain platform behind many NFTs), but giving no additional details, instead promising to “change the game.”
GameStop shares have skyrocketed about 860% over the past year, valuing the firm at more than $13 billion despite falling roughly 65% from an all-time high in January.
Last January, Reddit traders famously declared GameStop their meme stock of choice as they bought up Wall Street’s most heavily shorted companies. GameStop was among the worst-hit of brick-and-mortar retailers over the past decade as independent companies like Minecraft gobbled up market share, but its shares began to surge at the tail-end of 2019, when 36-year-old investor Ryan Cohen started buying up shares at about $6 and blasting management for “lack[ing] the mindset, resources and plan needed to [help GameStop] become a dominant sector player.” Cohen was tapped as the firm’s chair in April but has so far remained fairly mum about his turnaround plans. Last month, the firm reported third-quarter revenue of $1.3 billion, about 30% more than the same period one year prior, but a wider-than-expected loss of $105 million.
After skyrocketing more than 800% last January and then plunging as much as 70%, GameStop and other meme stocks have continued to draw massive fanfare from retail investors, despite bouts of intense volatility. “The retail force behind this movement is still strong, so it is anyone’s guess how much larger this can grow,” Oanda Senior Analyst Ed Moya wrote in a recent note. GameStop’s stock price is more than double the average one-year price target among analysts on Wall Street of $83.
NFT trading volume totaled more than $23 billion last year, reflecting a staggering increase from less than $100 million in 2020.