Atari (PA:ATAR), the once globally-renown company that spearheaded its way to international fame by launching classic videogames like “Pong,” saw its share prices soar recently after the company dived head-first into the crypto-craze currently shaking markets around the world. The digital entertainment giant that once enthralled the world with its products decades ago has suffered poor performance in recent years, having only recently saved itself from bankruptcy, and many savvy analysts see its cryptocurrency move as nothing more than a flashy show to gain the attention of investors.
Fooling the market again
It should go without saying that any company which opts to dive head-first into the ongoing crypto-boom that’s spreading across global markets is likely only trying to cash in on the craze surrounding these fledgling digital currencies, but it appears that Atari is the latest company to fool the market with its ambitious crypto-ploy.
The company’s stocks surged by as much as an astonishing 60 percent after news that it would be diving into the crypto-industry broke, though the market is likely to calm down soon and realize that Atari is not the market giant that it once was.
After Kodak’s now infamous cryptocurrency gamble grabbed countless global headlines, it seemed like other companies wised up and realized they could enjoy a sudden influx of cash, too, were they only to get into the fledgling cryptocurrency industry. Atari’s launching of “Atari Token,” the latest in a countless stream of digital currencies hoping to piggyback on the success of Bitcoin, appears to have at least temporarily fooled the market enough to radically inflate the company’s share prices.
While Atari CEO Fred Chesnai was right to point out in a recent press release that blockchain technology has massive potential, and could stand to lead the tech market for years to come, he was less than honest with investors when it came to Atari’s real motives. The company, which only pulled itself out of the jaws of bankruptcy and market death but a few years ago, likely sees the current crypto-craze as an ideal way to swell their coffers in an attempt to remain relevant in a rapidly changing market.
While games like Atari’s “Pong” once delighted consumers across the globe, the company has fallen from the industry heights it once dominated, and its latest publicity-grabbing stunt is unlikely to put much wind in its sails.
Atari’s new “Atari Token” will only be available on a new digital platform that the company is pioneering with third party assistance, meaning it’s unlikely to take off in the broader crypto-market, even if investors didn’t see through it and detect it for the PR-gamble that it was. While blockchain tech is likely to grow in importance in future years with the global gaming community like The Abyss using the technology to offer crypto games.
The company’s founder, Konstantin Boyko-Romanovsky believes this could be the future of the gaming industry, through the widespread adoption of cryptocurrencies However, as far as Atari is concerned, investors who believe that the company will really be at the forefront of the emerging industry have drunk the Kool-Aid, and should remind themselves of the company’s rather dismal prospects before throwing their financial weight behind it.
Don’t be lured in by cryptocurrencies
While Atari’s ploy may sound flashy to some investors, such as its attempts to partner with Pariplay to allow gambling with its digital currencies, investors should know better, and do their best to resist the siren call of throwing more cash behind blockchain. These days, Atari’s only real worth is in its name, which still holds sentimental value within the hearts of its former customers around the world, and the idea that the company will be a cutting-edge tech pioneer leading the way on blockchain is laughable.
While the company may turn a quick buck for itself by licensing out its name for this ambitious crypto-gamble, it’s unlikely to make an impact in Atari’s long-term prospects. While the company’s executives deserve some praise from ensuring it didn’t totally collapse a few years ago, its recent performance has been less than stellar, and its failed to draw any sales-instigating positive press coverage.
As a matter of fact, in recent years, Atari has been criticized by repeatedly delaying its planned releases, and shareholders will likely be fed up with executives soon if the company doesn’t quickly release news on when it plans to release new products it can turn a profit on. No amount of cryptocurrency-hype in the world can save Atari from the hole it’s been digging itself into these past few years, and savvy investors would be wise to shun the company that’s hoping to take advantage of their interest in the budding cryptocurrency industry.
Vague and misleading cryptocurrency announcements are taking the market by storm, and investors everywhere should learn to wise up and keep clutching onto their money tightly until companies do more than roll out a flashy press release. Blockchain may be reshaping the future of the economy, but don’t expect it to pull off a miracle for Atari and rejuvenate the ailing company.