Fanatic Sells 60% Stake in Candy Digital Amid ‘NFT Market Implosion’

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Sporting goods company Fanatics is selling its stake in non-fungible token (NFT) company Candy Digital as confidence in the asset class wanes.

January 4 was reported that Michael Rubin’s sports company Fanatics was offloading its 60% majority stake in startup NFT.

Fanatics was launched in 2011 and has become a household name in sports merchandising and e-commerce, valued at $31 billion.

MLB ICON Leadoff NFT Collectibles, launched by Candy Digital in April 2022 MLB

However, the crypto bear market hit the NFT sector hard in 2022, and Rubin’s company is now apparently looking to steer away from “standalone” NFT businesses.

Novogratz’s Galaxy Digital-led investor group will buy the stake in Candy Digital, according to CNBC. In an email shared with the outlet, Rubin wrote:

“Over the past year, it has become clear that NFTs are unlikely to be sustainable or profitable as a stand-alone business.”

He said the sale of ownership of Candy Digital “enabled us to ensure that investors could recoup most of their investment in cash or additional shares in Fanatics.”

This is a favorable outcome for investors “especially in an imploding NFT market that has seen precipitous declines in both trading volumes and standalone NFT prices,” he added. . NFTs alone would not create much value, according to Rubin, who said:

“We believe digital products will have more value and utility when connected to physical collectibles to create the best experience for collectors.”

Fanatics acquired Topps Trading Cards for approximately $500 million in January 2022. Additionally, it acquired the rights to produce Major League Baseball Trading Cards and later NFTs after Candy Digital launched the year last.

Related: What’s left in the NFT market now that the dust has settled?

Fanatics raised $700 million in fresh capital in December 2022. The funding will be used for potential merger and acquisition opportunities in its collectibles, sports betting and gaming businesses, according to CNBC.

Candy Digital secured $100 million in funding in October 2021 with a valuation of $1.5 billion at the time.

However, NFT markets have declined significantly over the crypto winter of 2022. According to Market trackerdaily sales volumes have fallen from over 100,000 sales in January 2022 to around 15,000 today.

Cointelegraph has sought comment from Fanatics and Candy Digital but had not received a response at the time of publication.