What happened
Shares of Cinedigm (CIDM -1.98%) jumped Thursday after the film and TV content producer announced its plans to enter the booming non-fungible token (NFT) market. By the close of trading, Cinedigm's stock price was up 18.5% after rising as much as 31.5% earlier in the day.
So what
Cinedigm's shares have soared in recent days on speculation that it would enter the NFT space. An NFT is a unique digital asset that uses blockchain technology to register ownership and prevent duplication. Demand for NFTs has reached a fevered pitch this year, with one selling for a staggering $69 million earlier this month.
Cinedigm's stock is up sharply on excitement for its new NFT strategy. Image source: Getty Images.
Investors theorized that, as a digital entertainment company, Cinedigm could create NFTs based on its growing library of films and TV shows. Well, Cinedigm CEO Chris McGurk apparently thought that was a pretty good idea.
"Cinedigm is excited about the rise in consumer adoption and commercial prospects for NFT," McGurk said on Twitter late Wednesday. "Given our extensive film library, deep connection to fandom and collectibles, and CIDM's strong brand partnerships and technology capabilities, I have directed our product team to develop new NFT products to enhance the user experience of our loyal audiences."
Now what
Although NFTs could present Cinedigm with a new source of revenue and profits, investors may want to temper their enthusiasm. "To be clear, these new NFT initiatives are to support our core mission: creating great streaming channel and content experiences for our passionate user base," McGurk said.
