Gamestop partners with Immutable X! Positive news leads to a surge, but is there market dumping afterwards?

The long-standing US game retailer Gamestop announced a partnership with the Ethereum Layer 2 scaling solution Immutable X last Wednesday. Immutable X will provide technical support for Gamestop's upcoming NFT marketplace and together they have established a $100 million IMX fund to support developers working on game NFT projects. However, there seems to be some underlying issues in their relationship, not as straightforward as it appears on the surface.

Gamestop x Immutable X

Immutable X is a Layer 2 scaling solution built on Ethereum, designed specifically for token-driven games and NFT-based projects. Compared to Ethereum, it can handle a large number of transactions at lower costs. GameStop's NFT marketplace will focus on NFT assets that can be used in games, making this collaboration complementary; Immutable X provides technical support while GameStop leverages its reputation as a well-established game retailer to promote the partnership.

"This marks a significant leap for the gaming and blockchain industries, further validating the immense utility of NFTs and blockchain technology, reaching a broader audience," said Robbie Ferguson, founder of Immutable X.

As part of this collaboration, the two parties have launched a $100 million IMX Fund to attract talented developers and game studios to adopt GameStop's NFT marketplace.

Gamestop's Dumping Behavior

According to the collaboration document submitted by GameStop to the U.S. Securities and Exchange Commission on Thursday, Immutable X agreed to gradually grant Gamestop approximately 56.2 million IMX tokens worth about $150 million upon meeting specific conditions.

However, after receiving the first batch of IMX tokens from Immutable X, approximately 28.1 million tokens, GameStop, within less than a day, sold around 50% of the IMX tokens on exchanges such as Binance, Huobi, and OKX, as discovered by Twitter user polka. The flow of funds can be traced on Etherscan.

Following the announcement of the partnership between GameStop and Immutable X, the price of IMX surged by approximately 25% due to this positive news, reaching a high of $4.2. However, GameStop began gradually dumping its holdings at market peaks, leading to a continuous decline in the token price, which has now fallen below its initial pre-surge levels.

Opinions on this event vary online. Some believe that GameStop's hasty selling of IMX tokens, especially after helping boost the price, damages the reputation of both companies. However, others argue that it is reasonable for companies to have financing needs and selling tokens is within their rights, especially when there are no lock-up periods specified in the contract.

However, judging from the token's performance, IMX seems to have temporarily lost favor with investors. While the collaboration with the well-established game retailer has garnered significant media attention, it has also sparked some concerns and panic selling.