After several months of speculation, fans of GameStop (NYSE:GME) and r/WallStreetBets finally got what they wanted. Yesterday, GameStop announced that it would be creating a marketplace for non-fungible tokens (NFT). In response, shares of GME stock traded as much as 30% higher during Thursday’s after-hours session before cooling down.
GameStop also reported that it would be hiring more than 20 people to run the NFT marketplace. Furthermore, the company is asking certain game developers and publishers to list their NFTs on its marketplace when it debuts later this year. GameStop is already close to signing partnerships with two undisclosed crypto companies to help in the development of NFT games that use blockchain technology. Looking forward, the video-game retailer expects to sign similar agreements with other crypto companies and invest millions of dollars into NFT projects and content creators.
It seems then that Chairman Ryan Cohen is keeping his promise to turn GameStop around. The Chewy (NYSE:CHWY) co-founder joined the board of GameStop last year with a goal to make the company more tech-centric. CEO Matt Furlong also stated in a call with analysts that “We believe our emphasis on the long term is positioning us to build what will ultimately become a much larger business.”
With the NFT news in mind, what might GME stock look like in 2022?
GME Stock Price Predictions
- Jefferies has a $180 price target. Analyst Stephanie Wissink praised GameStop’s plans for a digital transformation and its diversification of sales. The analyst added that “We recognize that management is speaking to both a sophisticated institutional investor base AND individual shareholder enthusiasts, providing just enough strategic visibility but yet leaving room for both dreamers and discounters.”
- Wedbush has a $45 price target. After GameStop reported Q3 earnings, analyst Michael Patcher commented that “Yet again, management failed to provide clarity around a long-awaited digital transformation plan that has been hinted at in the past but has yet to crystallize.” However, this price target hasn’t been updated since GameStop announced its NFT marketplace, so it will be interesting to see what Patcher thinks of the new venture. Patcher added that “GameStop should see flattish top-line growth in 2022, and we remain quite optimistic that it will return to profitability by then.”
- Ascendiant Capital has a price target of $23. This implies staggering downside of 84%. Analyst Edward Woo believes that GameStop’s digital transformation will carry significant risks that will offset the chances of a company turnaround. Furthermore, Woo theorizes that GameStop doesn’t trade on fundamental value, but instead on “retail investors sentiment, hope, momentum, and the powers of crowds.”
On the date of publication, Eddie Pan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.