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Playboy lost $4.9M on Ethereum NFT payments

Playboy lost $4.9M on Ethereum NFT payments

Hugh Hefner’s Playboy’s parent company, PLBY Group (PLBY), announced a $4.9 million impairment loss on the Ethereum it held last year, as crypto winter caused a significant drop in broader market prices.

The lifestyle and media company accepted Ethereum as payment for its “Rabbitars” non-fungible tokens (NFTs) launched in 2021, which it holds on its balance sheet as digital assets, according to an annual filing published on Thursday. In terms of the filing, the value of the digital assets as of the previous year was $327,000.

In a previous filing, the value of the company’s digital assets as of September 30 of last year was $1.75 million.

 
 
 
 
 
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indefinite-lived intangible assets

The company classifies its digital assets as “indefinite-lived intangible assets,” which are subject to impairment losses if their fair value falls below their carrying value at any time. Even if the fair value of the assets increases after the impairment losses, the company cannot recover its impairment losses on digital assets.

“The market price of one Ethereum in our principal market ranged from $964 – $3,813 during the year ended December 31, 2022, but the carrying value of each Ethereum we held at the end of the reporting period reflects the lowest price of one Ethereum quoted on the active exchange at any time since its receipt,” according to the filing. “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,” the filing has said.

In October 2021, at the height of the cryptocurrency market, the company launched its “Rabbitar” NFT project. Ether, the native token of Ethereum, has lost approximately 60% of its value since October 2021, according to data from TradingView.

How Playboy entered NFT market

Playboy entered the NFT and blockchain technology industries earlier in 2021 with its “Liquid Summer” NFT drop, a collection of digital artworks created in collaboration with the artist Slimesunday. The collection, which will be released in May 2021, will feature archival photographs of Playboy model Lenna Sjooblom, also known as the “First Lady of the Internet.”

This was not the company’s first foray into the world of digital assets, however. In 2018, Playboy TV began accepting bitcoin payments. In June, Bitcoin payments were added to http://Playboy.com .

Content Source: coindesk.com

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Tina concentrates on all matters related to NFT and Web3. Tina uses social media to spot NFT trends and report unique news.

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