What's In Your Wallet
Candy Digital 60% Stake From ‘Fantastic’ Sales Despite Imploding NFT Market
Fanatics, a firm that specializes in the sale of sports apparel, has decided to sell its position in the nonfungible token (NFT) company Candy Digital due to the fact that the company has lost faith in the asset class.
On January 4, it was disclosed that Michael Rubin‘s sports firm, Fanatics, will be selling off its majority 60% investment in the NFT startup.
Fanatics was founded in 2011, and since then, the company has expanded to become a well-known brand name in the fields of both the e-commerce business and the field of sports merchandising. At this time, it is estimated to be worth $31 billion.
Despite this, the poor market for cryptocurrencies in 2022 has had a big influence on the NFT business, and Rubin’s organization looks to be considering a shift away from “standalone” NFT enterprises as a result.
CNBC reports that Galaxy Digital, led by Mike Novogratz, will be purchasing a share in Candy Digital as part of an investor group that will purchase the share. This information was provided by the company on their own initiative. The following was written by Rubin in an email that was sent to the publication and forwarded on to them:
“It has been very clear over the course of the past year that NFTs are extremely unlikely to be profitable or sustainable as a stand-alone business venture.”
He explained that the sale of their ownership stake in Candy Digital enabled them to assure investors were able to repay the majority of their investment via cash or new shares in Fanatics.
As a result of this event, investors came out ahead, which was a positive development. He went on to say that “this was particularly significant, especially in an imploding NFT market that has seen precipitous decreases in both transaction volumes and pricing for standalone NFTs.” Rubin stated that there would not be much value created by NFTs on their own:
“Because we want to provide the most pleasurable experience possible for collectors, we believe that digital products will have higher value and utility when they are related to tangible treasures.”
In January 2022, Fanatics completed the acquisition of Topps Trading Cards from their former owner by making a payment of roughly $500 million. Following the launch of Candy Digital the previous year, the company went on to acquire the rights to produce trading cards for Major League Baseball and, later, Next-Gen Trading Cards (NFTs).
The month of December saw Fanatics achieve their goal of successfully raising new financing in the sum of 700 million dollars. According to CNBC, the corporation intends to make use of the cash in order to study prospective opportunities for mergers and acquisitions across its gaming, sports betting, and collectibles industries.
Candy Digital was able to secure funding in the amount of $100 million in October of 2021, placing the company’s value at $1.5 billion at the time.
Despite this, the non-fungible token (NFT) markets have seen major contractions as a result of the crypto winter that occurred in 2022. According to the market tracker on Nonfungible.com, the daily sales volumes have substantially reduced from over 100,000 sales in January 2022 to roughly 15,000 sales in the present day. This marked decrease can be attributed to the market’s overall bearish sentiment.
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