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PLBY Group, Parent Company of Playboy, Takes $4.9 Million Impairment Loss on Ethereum Used as Payment for “Rabbitars” NFTs

PLBY Group, the parent company of Playboy, has reported a $4.9 million impairment loss on the Ethereum it held last year due to the significant decline in the broader market prices during the crypto winter. PLBY Group accepted Ethereum as payment for its “Rabbitars” non-fungible tokens (NFTs) launched in 2021, which it holds as digital assets on its balance sheet. The value of these digital assets was $327,000 as of last year, down from $1.75 million as of Sept. 30, 2021.

In an annual filing on Thursday, the company explained that it accounts for its digital assets as “indefinite-lived intangible assets” subject to impairment losses if the fair value of the assets falls below their carrying value. The impairment losses taken on these assets cannot be recovered, even if the fair value of the assets rises after taking the impairment losses.

According to the filing, “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.”

The filing also noted that negative swings in the market price of Ethereum could have a material impact on the company’s earnings and carrying value, while only a rise in prices will impact the company’s earnings positively when the Ethereum held on the balance sheet is sold at a gain.

Playboy launched its “Rabbitar” NFT project during the peak of the crypto market in October 2021, and Ether lost about 60% in value since then. The company entered into the NFT and blockchain technology industry earlier in 2021 with its “Liquid Summer” NFT drop, featuring digital artworks created in collaboration with the artist Slimesunday.

The “Liquid Summer” collection, which was minted in May 2021, features archival photographs of Playboy model Lenna Sjööblom, the so-called “First Lady of the Internet.” However, these NFT drops were not the first foray for the company into the world of digital assets. In 2018, Playboy TV began accepting bitcoin payments, and in June, bitcoin payments expanded to

It remains to be seen how PLBY Group will navigate the volatile crypto market and whether it will continue to hold digital assets on its balance sheet. Nonetheless, the company’s move into the NFT and blockchain technology industry shows its willingness to adapt to changing market trends and explore new revenue streams.

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