CNBC: Fanatics Offloads Stake in NFT Company as ‘Crypto Winter’ Batters Digital Assets
Sports activities ecommerce platform Fanatics is divesting its 60% majority stake in NFT firm Candy Digital, with Fanatics Founder Michael Rubin saying “it has become clear that NFTs are unlikely to be sustainable or profitable as a standalone business,” in a letter obtained by CNBC.
Rubin co-founded Candy Digital in June 2021 alongside crypto investor Mike Novogratz and digital media entrepreneur Gary Vaynerchuk, and the corporate swiftly secured a long-term deal to change into the official NFT companion of Main League Baseball. Different sports deals adopted — together with one with the skilled wrestling group WWE — together with $100 million in Series A funding in October 2021 that valued the corporate at $1.5 billion. However then… Crypto Winter arrived.
“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,” mentioned Rubin within the letter, in keeping with CNBC.
Fanatics offered its share of Sweet Digital to fellow Co-founder Novogratz, though what Fanatics acquired for its stake within the firm shouldn’t be recognized.
In his letter Rubin added that “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.” Clearly Rubin is trying to focus Fanatics’ efforts on its bodily buying and selling card enterprise, which bought a giant enhance when the corporate acquired Topps in January 2022. By December 2022, Fanatics had reached a valuation of $31 billion after it raised an extra $700 million in capital, the majority of which will probably be used for mergers and acquisitions throughout the corporate’s collectibles, betting and gaming companies, in keeping with CNBC.
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