Fanatics, the retailer specializing in licensed sports merchandise, is divesting 60% of its stake in the non-fungible token (NFT) company Candy Digital, according to reports. The company is selling its Candy Digital stake to an investor group associated with billionaire Mike Novogratz and his firm, Galaxy Digital.
Report Says Sports Retail Giant Fanatics to Sell Majority of Candy Digital Stake
After a rough 2022 in the non-fungible token (NFT) industry, licensed sports merchandise firm Fanatics has decided to sell 60% of its Candy Digital shares, according to a CNBC report published on Jan. 4, 2023. CNBC obtained an internal email citing Fanatics CEO Michael Rubin.
“Divesting our ownership stake at this time allowed us to ensure investors were able to recoup most of their investment via cash or additional shares in Fanatics – a favorable outcome for investors, especially in an imploding NFT market that has seen precipitous drops in both transaction volumes and prices for standalone NFTs,” the email allegedly written by Rubin details.
The news of Fanatics dropping 60% of its stake in Candy follows the NFT company reportedly laying off over a third of its staff at the end of Nov. 2022, according to multiple people familiar with the situation. The founder and executive chairman of Fanatics further detailed that the decision to sell its Candy shares was a “rather straightforward and easy decision for us to make for several reasons.”
“Over the past year, it has become clear that NFTs are unlikely to be sustainable or profitable as a standalone business,” Rubin’s email explains. “Aside from physical collectibles (trading cards) driving 99% of the business, we believe digital products will have more value and utility when connected to physical collectibles to create the best experience for collectors.”
Fanatics operates several e-commerce sites, including nflshop.com and fanatics.com. In Jan. 2022, the firm acquired candy and collectibles company Topps for about $500 million. Like Candy, Topps also provides a number of NFT collections and its own marketplace for digital collectibles for brands such as Major League Baseball (MLB) and Garbage Pail Kids.
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Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
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