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Fanatic to sell majority 60 percent stake in Candy Digital as NFTs lose steam

An investor group led by Mike Novogratz's Galaxy Digital will be purchasing Fanatics' majority stake in Candy Digital

Shashank Bhardwaj
Published: Jan 5, 2023 05:21:03 PM IST
Updated: Jan 5, 2023 05:23:06 PM IST

Fanatic to sell majority 60 percent stake in Candy Digital as NFTs lose steamImage: Shutterstock

Sports merchandise company Fanatics is selling its majority 60 percent stake in NFT company Candy Digital as interest in NFTs decreases. 

Fanatics, which was founded in 2011 and is valued at $31 billion, has a strong presence in sports merchandising and e-commerce. However, the declining crypto market has affected the NFT sector, leading Fanatics to shift away from solely focusing on NFT businesses.

A group led by Mike Novogratz's Galaxy Digital will be purchasing Fanatics' majority stake in Candy Digital. 

According to Fanatics founder Michael Rubin, it has become clear that NFTs are not likely to be profitable or sustainable as a standalone business and that NFTs alone do not create much value. As a result, Fanatics has decided to divest its ownership in Candy Digital and allow investors to recoup their investments through cash or additional shares in Fanatics. 

Rubin also stated that standalone NFTs have seen drops in both transaction volumes and prices in an imploding NFT market and that they believe that digital assets will have more utility and value when connected to physical collectibles to create the best experience for collectors.

Fanatics acquired Topps trading cards for around $500 million in January 2022 and also gained the rights to make Major League Baseball trading cards and NFTs. 

Fanatics also raised $700 million in December to use for potential merger and acquisition opportunities in its collectibles, sports betting, and gaming businesses.

Candy Digital secured 100 million dollars worth of funding in October 2021 with a valuation of 1.5 billion dollars.

However, the NFT market has decreased significantly during the current crypto winter, with daily sales falling from over 100,000 in January 2022 to approximately 15,000 currently, according to Nonfungible.com.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash

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