Billionaire investor Mike Novogratz has led an investor group and purchased a further 60% stake in the NFT platform Candy Digital.
The buy sees Novogratz’s Galaxy Digital, a co-founder of Candy Digital, now the controlling shareholder of the NFT platform, after agreeing a price with majority shareholder Fanatics.
The news comes amid concerns about the future of the NFT space, which has seen a huge decline in interest since the highs of November 2021.
Not that the crypto winter has ever put Mike Novogratz off, however. The former Goldman Sachs trader has been in crypto for many years and bared the winters. In fact, his crypto hedge fund Galaxy Digital launched in 2018 during the midst of the previous crypto winter.
The billionaire investor is clearly in it for the long haul and sees Candy Digital as a bargain. Buy when there’s blood on the streets, so they say. There has been no official comment from Mike Novogratz as yet.
Fanatics Sells its Stake in Candy Digital
Galaxy Digital bought the stake in Candy Digital from sports merchandising giant, Fanatics, who co-founded the platform with Novogratz. Their CEO Michael Rubins said the company was selling its stake to look after investors’ money, after raising $700m in fresh capital just last month.
“Divesting our ownership stake at this time allowed us to ensure investors were able to recoup most of their investment via cash or additional shares in Fanatics,” said Rubins. “A favorable outcome for investors, especially in an imploding NFT market that has seen precipitous drops in both transaction volumes and prices for standalone NFTs.”
It’s clear the sports merchandise CEO has been shaken by the crypto winter, just 18 months after launching the NFT platform, with Rubins saying he doesn’t believe NFTs can be a standalone business and will need to be linked with physical collectibles instead.
“Over the past year, it has become clear that NFTs are unlikely to be sustainable or profitable as a standalone business,” Rubin said. “Aside from physical collectibles (trading cards) driving 99% of the business, we believe digital products will have more value and utility when connected to physical collectibles to create the best experience for collectors.”
Fanatics Looking Beyond Web3 and Towards an IPO
Fanatics only purchased Topps trading cards in January last year for $500 million, and is now looking to move away from the Web3 realm and make more investments in the physical collector’s space.
Rubin recently convened with over 90 financial experts from different Wall Street firms in order to present Fanatics’ current and future expansion plans. And with a valuation now of over $31 billion, the former e-commerce platform is looking to go public via an IPO.
With the sports merchandising giant now looking in its Web3 rearview mirror, the reigns for Candy Digital are left to Mike Novogratz and co. But with nearly 10 years’ experience in the crypto industry, it will take a lot to shake Novo out.