Fanatics, the American online manufacturer and retailer of licensed sportswear, sports collectibles, NFTs, trading cards, and sports merchandise, announced its decision to sell its 60% stake in Candy Digital sports NFT company.

Michael Rubin, Fanatic’s chief executive officer, informed its employees about the stake sale through an email that has been obtained by CNBC. It was reported that Fanatics is the biggest shareholder of Candy Digital and now it will be divesting its interest to a Galaxy Digital-led investor group.

Galaxy Digital is known to be a cryptocurrency merchant bank being managed by Mike Novogratz who was one of the original founding shareholders. In any case, Candy Digital is still new and only founded in June 2021 amid the NFT boom in the sports field.

When it was launched, it has become one of Dapper Labs digital sports collectible firm’s rivals. One of Candy Digital’s major contracts is probably its agreement with Major League Baseball (MLB) where it was tasked to produce non-fungible tokens (NFT) for the league. The company also created and launched digital collectibles in partnership with World Wrestling Entertainment (WWE), Netflix’s Stranger Things, and some Nascar teams.

Everything was going well at first but the NFT market saw a decline in the midst of the so-called “crypto winter” which refers to the poor performance in the cryptocurrency market. The values of NFTs in this period have plummeted and this resulted in big sales drops in NFT companies including the major ones such as Dapper Labs.

“As we are getting back into the swing of things, I wanted to share some news with all of you. Effective immediately, Fanatics has divested our approximately 60% stake in Candy Digital,” Rubin said in the email. “When we looked at all the factors on the table, this was a rather straightforward and easy decision for us to make for several reasons.

He added, “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 - a favorable outcome for investors, especially in an imploding NFT market.”

Finally, CoinDesk reported that the decision to divest its 60% Candy Digital stake comes amid a market reset for cryptocurrency, especially in sports NFTs.

Photo by: BoxFolders/Fanatics Media Resources