Concerned With Struggling NFT Market, Fanatics Relinquishes Shareholding In Candy Digital

Fanatics Decides To Dispose Off Its Majority Shareholding In Candy Digital

The market pertaining to non-fungible tokens (NFTs) was booming in 2021, however, it literally came to the brink of crashing in 2022.

2021 was hence the golden time for the NFT market which attracted international brands into the industry. One such internationally popular brand was ‘Fanatics’, which also became part of the NFT market.

Fanatics is a globally renowned sports merchandise manufacturing brand. The brand acquired 60% of shares belonging to an NFT company called “Candy Digital”.

It has now been confirmed by Michael Rubin, CEO of Fanatics that his company is disposing off its 60% shareholding in Candy Digital.

In an email, the CEO of Fanatics said that the NFT market has deteriorated to an extent that NFT sales volume and value have dropped relentlessly.

He also said that considering the NFT market’s nose dive, it wouldn’t be possible for Fanatics to keep a stake in Candy Digital.

Candy Digital is No Longer Viable for Business

One of the reasons behind Fanctics selling its stake in Candy Digital is the non-viability of the latter to keep up the business.

It was noted in the press in November 2022 that Candy Digital had laid off 1/3 of its employees due to financial hardships.

Perhaps this was the main reason why Fanatics has decided to relinquish its majority shareholding in Digital Candy.

However, this assumption is denied in a statement from the founder of Fanatics who informed that the decision was taken for several reasons.

The founder also denied that the decision to relinquish majority shareholding is rather deliberate and quite straightforward.

Reverting Back To Old Fashioned Ways

Rubin’s email further acknowledges that NFT market conditions may not thrive in the near future. He hence suggested in the email that NFT markets would not be profitable for some time.

The CEO then advised in the email that it is time for the brand to get back to traditional ways of drawing consumers’ attention.

For instance, he suggested that the company should need focus on physical collectibles instead of digital collectibles.

Fanatics owns and operates a number of e-commerce websites where it sells sports merchandise and collectibles. For instance, fanatics.com and nflshop.com are the two flagship e-commerce websites of the brand.

It was in January 2022 when Fanatics acquired a majority shareholding in Candy Digital and Topps. At that time, the acquisition cost roughly over $500 Million to Fanatics.

Both of the acquired companies were part of the NFT market and were involved in launching NFT collectibles.

NFT Market Lost Interest

It is true though that since 2022, the NFT market has been going down otherwise it was developing rapidly. Although the industry had its high movements in 2022, most of the year has been rather disastrous.

The market was affected by the macroeconomic impacts which adversely affected global markets, including the digital asset industry. When the digital asset industry saw its leaders falling on the ground, the NFT market also declined.

NFTs sales volume has declined massively by at least 60% since 2022. Similarly, the value of this economy of collectibles is also shrinking every day.

With every passing day, the situation of the non-fungible token market is moving into a darker zone. If it continues happening, then the NFT sector will lose its entire traction.

The users will start finding other projects and segments within the crypto industry that they may find interesting and profitable, moving away from the industry.

This would mean the end of the non-fungible token sector and this is something that cannot be afforded at this time.

Fanatics’s decision of relinquishing its shareholding in the NFT market’s company hence finds support. For a business like Fanatics, it is not advisable to do business with a company that is going to collapse soon.

Reports suggest that a company belonging to Mike Novogratz of Galaxy Digital is interested in buying shares of Candy Digital from Fanatics.