As trust in the investment portfolio dwindles, sports apparel manufacturer Fanatics is selling its shares in Candy Digital, a nonfungible token (NFT) startup.
Fanatics, a sports company owned by Michael Rubin, was reportedly selling its 60% investment in the NFT startup on January 4.
Fanatics, which was established in 2011 and is now estimated at $31 billion, is a well-known brand in sports merchandise and online shopping.
However, the NFT industry has been severely impacted by the crypto bear market in 2022, and Rubin's company appears to be aiming to move away from “standalone” NFT firms.
According to CNBC, a group of investors led by Mike Novogratz's Galaxy Digital will buy a share in Candy Digital. Rubin stated in a message that was sent to the publication:
“Over the past year, it has become clear that NFTs are unlikely to be sustainable or profitable as a standalone business.”
According to him, selling off our stake in Candy Digital “enabled us to make sure investors were able to recuperate the majority of their investment via cash or new shares in Fanatics.”
“Especially in a collapsing NFT market that has seen precipitous decreases in both transaction volumes and pricing for standalone NFTs,” he continued, this was a positive conclusion for investors. NFTs by themselves wouldn't add much value, as per Rubin.
“We believe digital products will have more value and utility when connected to physical collectibles to create the best experience for collectors.”
Topps trading cards were purchased by Fanatics in January 2022 for about $500 million. After Candy Digital's debut last year, it also obtained the rights to create Major League Baseball trading cards and later NFTs.
In December, Fanatics raised $700 million in new funding. According to CNBC, the money would be used to investigate possible merger and acquisition options across the company's collections, sports betting, and gaming sectors.
In October 2021, Candy Digital obtained $100 million in investment at a $1.5 billion valuation.
The NFT markets, meanwhile, have significantly decreased throughout the 2022 crypto winter. The daily sales volumes have decreased from over 100,000 purchases in January 2022 to little under 15,000 now, according to the Nonfungible.com market tracker.
As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!
iOS: t.ly/UUCj
Android: t.ly/cfYt