PLBY Group, Playboy’s parent company, has lost $4.9 million because of the sharp declines across the cryptocurrency space. The company had sold its Rabbitars NFTs for Ethereum, which has now lost much of its value.
Playboy launched its NFT line in 2021 and accepted Ethereum as a payment method for the tokens. However, the price of Ethereum coins plummeted, resulting in big losses for the media company.
As reported, Playboy’s digital assets, valued at $1.75 million at the end of September 2022, have now declined to $327,000. The so-called crypto winter has greatly impacted the company’s decentralized currency portfolio.
The worst part for Playboy is that it accounts for its digital assets as “indefinite-lived intangible assets.” These are subject to impairment losses that cannot be recovered even if the price of the crypto tokens rises again.
As noted by the company, Ethereum coins’ price fluctuated heavily in 2022. Turbulent periods saw the coins rise and decline, with their lowest price being $964. However, the carrying value of each token the group held at the end of the reporting period reflects the lowest price of one Ethereum since its receipt.
Therefore, negative swings in the market price of Ethereum could have a material impact on the company’s earnings and carrying value, while only time a rise in prices will impact the company’s earnings positively, is when the Ethereum held in the balance sheet, are sold at a gain.
Playboy statement
Playboy’s Passion for Blockchain Did Not Pay Off
Playboy’s Rabbitar NFTs were launched in October 2021 when cryptocurrencies were still one of the hottest topics. Back then, few could have predicted the current state of the crypto market and Playboy was interested in exploring new monetization opportunities.
The Rabbitar line actually was not Playboy’s first venture into the world of blockchain as it had launched the so-called Liquid Summer collection earlier that same year. The Liquid Summer line was created in collaboration with the artist Slimesunday and featured photographs of Lenna Sjööblom, a famous Playboy model.
Playboy was interested in the crypto space far before minting the Liquid Summer collection. This was attested by its decision to allow customers to subscribe to Playboy TV via Bitcoin in 2018. Playboy eventually allowed customers to use Bitcoin payments on Playboy.com as well.
Despite its genuine interest in the crypto space, Playboy now has to deal with significant losses.