Risk assets are pulling back as seasonal market factors and rising interest rates impact market sentiment. If you are poised to win on the next rally, then you already have your shopping list underway.
There are plenty of measures that suggest market sentiment is already at deeply pessimistic levels – when key bottoms tend to happen in pullbacks. Hence, it might be time to get that list ready, especially on a thematic level.
One area that may be of interest for growth-minded investors is the NFT space. NFTs, or non-fungible tokens, are digital cryptocurrency tokens representing ownership over some piece of digital real estate, which can include artwork, media clips, or anything that can be expressed in lines of code.
One key here in making projections is consideration of the total addressable market – the “TAM”. An easy path to analyzing this factor here is considering the size of the addressable market for all non-NFT collectibles that could at some point be represented as NFTs, and compare it to the size of the current NFT market.
Right now, based on 2020 data, the NFT market is doing about $300-350 million on an annual basis. That’s growing fast. But that’s where it is coming into this year. By comparison, according to TechCrunch, the estimated size of the global collectibles market is $370 billion.
$350 million versus $370 billion. Squaring up that disparity would imply 1,000%-plus growth in NFTs ahead. With that in mind, we take a look below at a handful of stocks that may represent some of the most interesting new opportunities in the NFT space.
Plby Group Inc (NASDAQ:PLBY) became a bigtime NFT play through the SPAC market after merging with an active SPAC fund last spring. The company owns rights to iconic media assets that lend themselves extremely well to the NFT marketplace.
According to its materials, the company connects consumers around the world with products, services, and experiences to help them look good, feel good, and have fun. PLBY Group serves consumers in four major categories: Sexual Wellness, Style & Apparel, Gaming & Lifestyle, and Beauty & Grooming. PLBY Group’s flagship consumer brand, Playboy, is one of the most recognizable, iconic brands in the world, driving billions of dollars in global consumer spend annually across approximately 180 countries.
Plby Group Inc (NASDAQ:PLBY) recently announced the expansion of its global consumer products and lifestyle business in India, in partnership with Jay Jay Capital and Investments, a leading India-based investment fund and brand operator. The new partnership will bring Playboy hospitality experiences to major metropolitan areas in India, with the first flagship venue expected to open in Gurgaon in December 2021.
“We are thrilled to partner with the best-in-class operators at Jay Jay Capital and Investments to build upon Playboy’s long history creating unrivalled hospitality experiences,” said Ben Kohn, Chief Executive Officer of PLBY Group, Inc. “The new Playboy venues in India will stand out as premium, aspirational experiences that serve as a forum for style, culture and convening for today’s young Indian consumers.”
And the stock has been acting well over recent days, up something like 15% in that time.
Plby Group Inc (NASDAQ:PLBY) had no reported sales in its last quarterly financial data. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($255.5M against $49.9M).
SFLMAVEN (OTC US:SFLM) is an interesting emerging player in the NFT space. The company is already successful as a high-end luxury goods auctioneer, pulling in over $140 million on the top line over the past two decades through its top eBay Inc (NASDAQ:EBAY) store. But now it is expanding its model and it seems to deserve a good look.
The company announced last week that it was planning to commission a talented artist to create a small batch of unique, limited edition digital artwork for sale through auction as NFTs. Management believes this will also help to bring awareness to the potential for the NFT movement to fuel interest in the local art scene.
SFLMAVEN (OTC US:SFLM) updated this interesting narrative earlier this morning with news that it has signed an LOI with a top artist to help kick off its emerging NFT strategy.
Specifically, the company announced the signing of an LOI between with artist Larry Calabrese toward the creation of digital artwork to form the initial foundation of the Company’s new NFT strategy.
According to the release, Calabrese is an accomplished artist, with an impressive collection of completed works from physical art to digital media covering a vast array of different styles from colorful abstract pieces to conceptual characters and landscapes based on sci-fi themes, including painting in front of crowds as large as 30,000 people on tours in the Southeastern US.
SFLMAVEN (OTC US:SFLM) CEO Joseph Ladin commented, “Larry is a special talent, and we look forward to working with him as our first artist-partner on the creation of a limited batch of unique digital artwork capable of shaping taste and driving value for collectors and investors focused on non-fungible tokens. At this point, we have the outlines of a tentative deal in place, and we are confident that it represents a strong initial foundation as we strive to position our collectibles marketplace segment as an emerging leader in the digital art and NFT marketplace.”
ZK International Group Co Ltd (NASDAQ:ZKIN) operates as a holding company, which through its subsidiaries engages in the manufacturing, research, development and sale of stainless steel pipes and carbon steel pipe products.
Its products include steel band, copper strip, welded stainless steel pipes and fittings, pipe fittings, valve, light industry machinery and equipment, and other stainless-steel products. The company’s products are used for projects that require sophisticated water or gas pipeline systems.
ZK International Group Co Ltd (NASDAQ:ZKIN) recently announced that xSigma Collectibles Limited, a subsidiary of the Company, has entered into a general partnership with ACES, a leading US baseball agency, to launch NFTs for their athletes on the MaximNFT platform. MaximNFT is a Non-Fungible Token (NFT) Marketplace and Platform that is being launched by xSigma in an exclusive partnership with the Maxim magazine (maximnft.com).
Under the partnership agreement, ACES will work closely with MaximNFT and xSigma’s team to launch NFTs for their athletes. MaximNFT will provide creative marketing and technical resources to assist ACES’s clients in the rapidly growing NFT space. Peter Pedalino, a principal at ACES, stated, “The NFT Industry is clearly going to be a major component in the future of the Sports Collectible Space. We want to lead in this evolution, and we are happy to have support from the MaximNFT’s team on this path.”
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action ZKIN shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -9% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.
ZK International Group Co Ltd (NASDAQ:ZKIN) managed to rope in revenues totaling $42.2M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 33.7%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($23.8M against $37.3M, respectively).
Other key tickers in the NFT space include Draftkings Inc (NASDAQ:DKNG), Cloudflare Inc (NYSE:NET), Wisekey International Holding AG – ADR (NASDAQ:WKEY), Oriental Culture Holding Ltd (NASDAQ:OCG), and Liquid Media Group Ltd (NASDAQ:YVR).
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