Playboy, one of the most recognizable names in the adult entertainment industry, has disclosed a significant loss of $4.9 million on its Ether (ETH) holdings, which it earned from a non-fungible token (NFT) collection launched in late 2021. The disclosure came in a filing by the company's parent, PLBY Group, on March 18, 2023.
The NFT collection, called Rabbitars, was launched in October 2021, just before the crypto market reached its peak. Ether's price has since dropped around 60% in line with the broader market decline, and as of December 31, 2022, the value of Playboy's crypto holdings stands at $327,000.
According to the filing, PLBY Group took an impairment loss of $4.9 million in 2022 as a result of the crypto prices downturn. Impairment losses are counted as unrecoverable, even if the fair value of digital asset holdings rises after recording the losses. The market price of Ether ranged from $964 to $3,813 during 2022. Still, the carrying value of each Ether that PLBY held at the end of the reporting period reflects the lowest price of one Ether quoted on the active exchange at any time since its receipt.
The company's statement further explained that positive swings in the market price of Ether are not reflected in the carrying value of its digital assets and impact earnings only when the Ethereum is sold at a gain. PLBY's NFT collection, Rabbitars, featured a variety of different types of NFTs, including an original art series, limited edition collectibles, and one-of-a-kind digital assets.
The Playboy brand is one of the most recognizable in the world, and its Rabbitars collection was highly anticipated by NFT collectors and Playboy enthusiasts alike. The collection was designed to be a unique and exciting way for fans to interact with Playboy's iconic brand and its rich history.
The loss incurred by PLBY Group highlights the risks associated with investing in NFTs, which remain highly speculative despite their growing popularity. The NFT market is still in its early stages, and the future of the industry remains uncertain. However, it is clear that companies and investors alike need to be prepared for the potential risks associated with investing in NFTs.
Despite the loss, Playboy remains committed to the NFT market and is likely to continue to explore opportunities in the space. The NFT market has shown significant growth potential, and as the industry continues to mature, Playboy may find new ways to leverage its iconic brand to drive value and create unique experiences for its fans.