What publicly listed companies are dipping their toes in NFTs?
Over the past two decades since the dot-com boom in the late 1990s that eventually led to the dot-com bubble in the year 2000, several new tech-investing trends have emerged, including artificial intelligence, blockchain technology, cryptocurrencies and — most recently — NFTs or non-fungible tokens.
NFTs are unique, one-of-a-kind digital tokens that can’t be interchanged (non-fungible). Holding an NFT associated with a certain digital asset designates that the holder is the rightful owner of that asset, and that information lives on the blockchain.
Some of the most notable NFT sales in the past year include a digital print by Mike Winkelmann, also known as Beeple, whose work was sold for $69 million at auction house Christie’s; the first tweet by Twitter founder Jack Dorsey that sold for $2.9 million; and the original “Doge” meme that sold for $4 million.
Leaping on the NFT bandwagon
As the popularity of NFTs exploded, a number of household brands have jumped in on the trend, hoping to cash in on the growing market and to also promote their new products. NFTs have become associated with digital collectibles and some brands, in an attempt to attract more customers, have attempted to launch exclusive NFT versions of their products.
Among them are food brands like McDonald’s (NYSE:MCD), Yum! Brands-owned (NYSE:YUM) Taco Bell and Campbell Soup (NYSE:CPB), as well as fashion brands like Louis Vuitton, Gucci, Dolce & Gabbana, and Nike (NYSE:NKE).
In October, McDonald’s launched its first-ever NFT, offering a limited number of NFTs called MCNFT to celebrate the return of the McRib to its menu in November. McDonald’s stock gained just over 1% after the announcement on Oct. 28.
Taco Bell hopped in on the trend prior to McDonald’s as it auctioned 25 NFT GIFs on NFT marketplace Rarible in March 2021. Yum! Brands’ stock barely moved after it revealed its foray into NFT collectibles.
Nike, meanwhile, joined the NFT bandwagon by taking a different route by acquiring an NFT collectibles studio called RTFKT (pronounced “artifact”). The deal, announced in December, also failed to prop up the company’s share price, falling marginally the day after the company disclosed the move.
Muted stock market response
The stock market’s muted reaction to the news of companies delving into NFTs hinted that traditional investors have not fully bought into the hype of NFTs yet. Rather, they perhaps perceive these digital tokens as another marketing strategy with a short shelf-life.
While the relationship between NFTs and stocks remains complicated at this stage, interestingly, the New York Stock Exchange has moved closer to this new form of investing. In February, the NYSE filed an application to register the term “NYSE” for an NFT marketplace, suggesting that the intertwining of NFTs and investing is just getting started.