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GameStop launches NFT marketplace, Three Arrows creditors granted court hearing

Yahoo Finance crypto reporter David Hollerith joins the Live show to break down GameStop's new NFT marketplace and the emergency meeting courts granted to Three Arrows creditors.

Video Transcript

- Let's shift over now to GameStop, which is announcing a much-anticipated move into the NFT space, launching its own marketplace for those nonfungible tokens. The move is a bid for the once-loved meme stock to turn around its fortunes. Yahoo Finance's David Hollerith joins us now with more. David, it's a rough time to be launching an NFT platform. But tell us more about what GameStop is hoping to do with this.

DAVID HOLLERITH: Yeah, Brian, the platform is built on Ethereum. And the idea, I think, starts with just essentially buying and selling digital assets. And the truth is that we don't have a lot of clarity in terms of what the company wants to do other than that, you know, this is a part of its broader push to pivot itself from solely brick and mortar to more of an ecommerce crypto play. The company has previously cited many times Web3 is the kind of business model they're going for. Now Web3 is sort of an open business model that has a lot of interpretations.

But, you know, right now, given that the company has announced the marketplace as of yesterday afternoon, there's a lot of open questions that remain. But in terms of the cost that goes towards this, GameStop has hired a number of employees for its growing blockchain side of its business. But the actual cost to spin up a marketplace varies a lot.

But from the experts I've spoken with, it doesn't necessarily cost a lot of money to spin up these things. And the company would retain money off of the transaction fees. So in terms of what this means for their business model, at least Matthew Furlong, the CEO, is projecting that it's a part of their plan and hopefully it can give them more value.

- Separately, in the crypto space, David, you've got Three Arrows creditors getting an emergency hearing here. What's the latest on that?

DAVID HOLLERITH: Yeah, they had an emergency hearing earlier today. It actually just ended. And, essentially, what was going on was the legal teams representing the creditors, the people who lent money to Three Arrows before they filed bankruptcy have been concerned that the Three Arrows founders have not been present in the hearing so far.

And they've also sort of said that this risks a higher likelihood that they could abscond with their assets before the court has possession of them. Because, obviously, the court wants to liquidate them so that the creditors can retain some money from the borrowed assets of what's left over of, essentially, this carcass of a business.

But Three Arrows has remained sort of, maybe you could say dodgy or at least has not been fully compliant with the creditors. And essentially this hearing, the only thing that really confirms, the judge ruled that all assets that belong to Three Arrows in the US will belong, are essentially frozen, meaning they cannot be transferred or moved by Three Arrows.

Now as far as how many assets that, how much of the company's assets that means for their total balance sheet, we really don't know. You know, I've spoken with a few restructuring lawyers about this who are just essentially observers at this point. And there's a lot of question. Three Arrows has been liquidated by a number of lenders. So there's a lot of question about how much money they have in terms of assets as it stands today.

Su Zhu, who is one of the co-founders, also before the hearing, he sort of broke his silence over Twitter and responded, sort of showing that, indicating from his side that the company is sort of being baited in this court case and that they have also received death threats. So that might be that's at least their indication for why they're not coming forward in a more, yeah, in a better way, essentially.

- Yeah, we'll have to continue to watch how all of that develops because it feels like very much far from the ending on that story. Got to find answers. David Hollerith, thanks so much.