Blast From the Past: Atari’s Comeback on NFT Mania in Peril
(Bloomberg) -- The bloom may be off the rose for a 1980s mainstay that more than doubled earlier this month after getting caught up in the meme stock mania.
Retail investors recently flocked into Atari SA as the entertainment software company announced plans for a foray into the online-casino market. But the frenzy to own the French penny stock that trades over-the-counter in the U.S. has died down after soaring more than 120% in March. The shares came off a three-year high hit earlier this week, and volume -- while still elevated -- has also been reduced.
The last time the maker of the video games of yesteryear traded above $1 was in February 2018, when the company said it was working on a cryptocurrency dubbed Atari token. That comeback was brief, though, with the shares trading below 70 cents by summer. In August of that year, even one of Elon Musk’s tweets couldn’t spur on another stock revival.
The company officially launched its blockchain project and the first private sales of the Atari Token in April 2020. The initiative generated 300,000 euros ($354,810) in revenue and another 200,000 euros of deferred sales in the first half of its fiscal year ended on Sept. 30, according to a statement.
Investors have been down similar roads before. Back in 2018, another once-vaunted, but formerly bankrupt household name attempted a short-lived comeback on cryptocurrencies, Eastman Kodak Co. The once-storied camera maker staged another revival last year on the heels of a $765 million government loan to make ingredients for generic medicines for Covid-19. Kodak’s stock has slumped more than 75% from its July’s highs.
It’s unclear how long the mania for NFT stocks will persist. Less recognizable peers dabbling in the cryptographic assets, like Sino-Global Shipping America Ltd. and Oriental Culture Holding Ltd., have also been sliding over the past two trading sessions. Atari rose about 1% in New York Wednesday, trimming an earlier advance of more than 7%.
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