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Author Topic: $4.9 Million in NFT lost - Playboy Company who accepted NFT as payment  (Read 22 times)
Flexystar (OP)
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March 19, 2023, 09:47:20 AM
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This is another loss by another company that is solely based on lifestyle and media niche. They are one of the companies who are accepting and supporting crypto through their digital nonfungible token called Rabbitars. These were accepted and valued in exchange for the valuable assets that the company was listing. Whether it is a signed photograph to some lifestyle charting, everything was getting paid in terms of NFT only.

The company started this Ribbitar project in October 2021 and soon it got valued at $327000 and it was a net carrying value until last year-end.

In a recent publication, they stated how they have lost money from heir balance sheet due to the volatility of ETH. Since they were accepting the payments at the highest price of ETH as well, soon their NFT got devalued as soon as the market crashed earlier.

The Playboy group, noted as PLBY group got an impairment loss of $4.7 million dollar.

Though it may not sound that a big deal, for the company, it was mismanagement with their balance sheet and acceptance of payment in a highly volatile environment.

Will it affect the future decisions of accepting payment in terms of crypto?

Quote
PLBY Group (PLBY), the parent company of the late Hugh Hefner's Playboy enterprise, said it took an impairment loss of $4.9 million on the ether (ETH) it held last year, as crypto winter created a significant decline in the broader market prices.
The lifestyle and media company said it accepted ether as payments for its “Rabbitars” non-fungible tokens (NFT) launched in 2021, which it holds in its balance sheet as digital assets, according to an annual filing on Thursday. The value of the digital assets sits at $327,000 as of last year, the filing said.
A previous filing shows the company's digital assets, which it refers to as Ethereum, were worth $1.75 million as of Sept. 30, 2022.

The company explained that the company accounts for its digital assets as “indefinite-lived intangible assets,” which are subject to impairment losses if the fair value of the assets fall below their carrying value, at any time. The impairment losses the company takes on the digital assets can’t be recovered, even if the fair value of the assets rise after taking the impairment losses.
“The market price of one [ether] in our principal market ranged from $964 to $3,813 during the year ended Dec. 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 said.

The company launched its “Rabbitar” NFT project in October 2021, during the peak of the crypto market. Ether, the native token of the Ethereum blockchain, lost about 60% in value since October 2021, according to TradingView data.
Earlier in 2021, Playboy entered into NFT and blockchain technology industry with its NFT drop called “Liquid Summer,” which is a collection of digital artworks created in collaboration with the artist Slimesunday. The collection, which minted in May 2021, features archival photographs of Playboy model Lenna Sjööblom – the so-called “First Lady of the Internet.”
However, these NFT drops weren’t the first foray for the company into the world of digital assets. In 2018, Playboy TV began accepting bitcoin (BTC) payments. In June, bitcoin payments expanded to Playboy.com.

Playboy Lost $4.9M on Ether It Accepted as NFT Payments
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