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

PLBY Group (PLBY), the parent company of Hugh Hefner’s Playboy, said it took an impairment loss of $4.9 million on the Ethereum it held last year, as crypto winter saw a significant decline in the broader market prices.

The lifestyle and media company said that it accepted Ethereum as payments for its “Rabbitars” non-fungible tokens (NFTs) 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 that the company’s digital assets were worth $1.75 million as of Sept. 30 of last year.

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 that 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 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 said.

The company launched its “Rabbitar” NFT project in October 2021, during the peak of the crypto market. Ether, the native token of Ethereum, lost about 60% in value since October of 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 payments. In June, bitcoin payments expanded to Playboy.com.

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