Fanatics, a top sports apparel brand, is selling 60% of its stake in Candy Digital NFT Company. This decision was made due to the decline in the market during the bear markets. Michael Rubin’s company owned the largest stake in the platform for sports NFT. Candy Digital has been sold to Mike Novogratz, the Galaxy Digital investor group. Continue reading to find out more about the reasons for this shift.
What is Fanatics selling its Majority Candy digital stake?
Fanatics, a leading sports retailer is selling 60% of its stake in Candy Digital. Mike Novogratz is the CEO of Galaxy Digital, a cryptocurrency merchant bank. In addition, Mike Novogratz, NFT founder, and thought leader Gary Vee, are also co-founding members at Candy Digital. Candy Digital was established during the bear market in 2021 and has since been a major player for NFTs within the sports market. It has released digital collectibles that include projects related to MLB (Major League Baseball), Netflix’s Stranger Things and WWE.
Michael Rubin had sent an email statement to Candy Digital earlier this week announcing Fanatics’ exit from Candy Digital. However, the email didn’t specify any specific value for the sale. The email indicates that the sale price is lower than $1.5 billion. The demand for NFTs in sports fell dramatically during the crypto winter of 2022. Comparatively, sports NFTs sales in February 2021 reached a record high of $225million, however, this has fallen to $2.2 million since December 2022, when the bear market began.
“Over the last year, it became clear that NFTs will not be viable or profitable in a stand-alone business.” Rubin wrote the email. We believe that digital products, apart from trading cards and physical collectibles driving 91% of our business, will be more valuable and useful when they are connected with physical collectibles in order to provide the best collector experience.
What can fanatics do to grow in Web3?
Fanatics is looking to transform their digital business model in order to be a leading platform for international sports enthusiasts. In December, the company was able to receive $700 million of fresh capital. This money will be used for expansions in its betting, collectibles and gaming business. During the crypto bear, however, NFT markets suffered a dramatic drop in sales. According to NonFungible market reports, the market fell from more than 100,000 in January 2022 down to about 15,000 today.
They are now looking to grow into trading cards and sports betting. They also plan to offer better “phygital experiences” to increase their brand’s value. Fanatics investors can also recoup the majority of their investment through the sale, according to an email. The cash can be used to purchase additional Fanatics shares or cash. It also explains why they didn’t consider the company a good fit for their ecosystem. Due to competing goals and objectives of shareholders, Candy was not fully integrated into the Fanatics culture or environment. It states.
Neither brand has made any further statements or comments regarding the trade-off. As we know, crypto winters can be as severe as any other season. Building for the future is the smartest move in these difficult times.
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