Publicly Listed Companies Dipping Their Toes in NFTs

Publicly Listed Companies Dipping Their Toes in NFTs

As NFTs (non-fungible tokens) have surged in popularity, several well-known publicly listed companies have begun to explore the space, hoping to capitalize on the growing market. These digital assets, representing unique ownership of a digital item verified via blockchain technology, have attracted major brands, particularly in the fashion and food industries, eager to tap into the NFT trend for both promotional purposes and potential future revenue streams.

NFTs Explained

NFTs are digital tokens that signify ownership of a unique digital asset, such as a piece of artwork, music, or a tweet. They are often used in the world of digital collectibles, and their sales have reached astounding figures—like Beeple’s digital artwork, which sold for $69 million. This has brought NFTs into the mainstream, prompting several publicly listed companies to experiment with them.

Companies Jumping on the NFT Bandwagon

• McDonald’s (NYSE:MCD): In October 2021, McDonald’s launched its first-ever NFT to celebrate the return of the McRib sandwich. The company offered a limited number of NFTs, called MCNFT, with the announcement briefly lifting its stock price by over 1%.
• Taco Bell (NYSE:YUM): Taco Bell, owned by Yum! Brands, made its NFT debut by auctioning 25 NFT GIFs on the marketplace Rarible in March 2021. However, its stock showed little movement in response to the launch.
• Campbell Soup (NYSE:CPB): Campbell Soup also dipped into the NFT space, exploring the possibilities of tokenizing its products to engage with a tech-savvy audience. While the initiative generated attention, it didn’t lead to a notable market reaction.
• Nike (NYSE:NKE): In a more direct approach to NFTs, Nike acquired the NFT collectibles studio RTFKT (pronounced “artifact”) in December 2021. This acquisition positions Nike as a key player in the digital collectibles space. Despite the strategic move, Nike’s stock only saw a marginal dip the following day, indicating that the market was still unsure about the long-term impact of NFTs on the company.
• Luxury Brands: Major fashion names like Louis Vuitton, Gucci, and Dolce & Gabbana have also dabbled in NFTs, launching digital versions of their luxury products or creating exclusive NFT collections to attract high-end customers and engage with a younger, tech-forward demographic.

Muted Stock Market Response

Despite these brands’ efforts, the stock market’s response has been largely muted. While NFTs have generated considerable media buzz, investors have not yet fully embraced the concept, viewing NFTs more as a novel marketing tool rather than a transformative business opportunity. This hesitation suggests that many traditional investors are unsure of the long-term value of NFTs, particularly when it comes to how they impact companies’ core financial performance.

The NYSE and NFTs

In an interesting development, the New York Stock Exchange (NYSE) has taken steps to connect NFTs with traditional investing. In February 2022, the NYSE applied to register the term “NYSE” for an NFT marketplace, signaling that the integration of NFTs into financial markets may be in its early stages.

Conclusion

Publicly listed companies, particularly in the food, fashion, and luxury sectors, have started to experiment with NFTs as a means to engage with new audiences and create exclusive digital products. However, the stock market’s lackluster response suggests that traditional investors remain cautious, viewing NFTs primarily as a marketing strategy rather than a game-changing asset class. With the NYSE’s moves toward NFTs, it’s clear that the intersection of digital tokens and traditional markets is still evolving.