Sports apparel and memorabilia firm Fanatics has sold its majority — 60% — in Candy Digital, a sports-focused NFT company, to a group led by Galaxy Digital following a recent round of layoffs at the startup.
Fanatics Sells its 60% Stake in Candy Digital
On Wednesday, January 4th, Michael Rubin, the CEO of Fanatics, announced to employees that the company had sold its majority stake in Candy Digital to a group led by Galaxy Digital.
In the internal e-mail sent to employees, Rubin explained that divesting Fanatics’ majority stake in Candy Digital ensured “investors were able to recoup most of their investment via cash or additional shares in Fanatics.”
Rubin also explained that this was a straightforward decision for the company after considering different options. The move follows a recent round of layoffs at the startup.
A Failing NFT Market
Although Fanatics, founded in 2011, has amassed a valuation of $31 billion, the company has felt the burnt of the crypto winter in 2022. Fanatics is now turning away from “standalone” NFT businesses.
Rubin explained that the sale resulted from the “imploding NFT market that has seen precipitous drops in both transaction volumes and prices.”
From January to September 2022, NFT trading volume collapsed by 97%, from $17 billion in value to just $466 million.
On the Flipside
- Despite the drop in prices, the total volume of NFTs sold in 2022 matched the boom of 2021, recording $24.7 billion compared to $25.1 billion from the previous year.
Why You Should Care
The sale of Candy Digital’s stake by Fanatics and the NFT data shows the far-reaching effects of the crypto winter, which has lasted over a year.
Despite the downtrend in NFTs, the sector has continued to grow. Read below:
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