PLBY Group has disclosed that during the previous year, the price of the Ethereum (ETH) assets it possessed decreased by approximately $4.9 million.
The parent business of Hugh Hefner’s Playboy has confirmed that the impairment loss was caused by the crypto winter that stormed thru the sector and adversely impacted market values across the board. This information was provided in a statement released by the parent company.
Losses might not be recoverable.
A recent filing (1) indicates that the lifestyle & media company has been taking Ethereum as payment for its non-fungible “Rabbitars” tokens. This information comes from the corporation (NFTs).
According to PLBY Group, the company considers these assets to be digital assets and includes them in its balance sheet.
The file, on the other hand, discloses that the value of the company’s digital assets as of the previous year was $327,000. On the other hand, according to a previous filing made on September 30th, the company’s digital assets were valued at $1.75 million.
In spite of the inconsistencies, the business asserts that it conducts its operations under the principle that its digital assets are “indefinite-lived intangible assets” and that these assets are susceptible to impairment losses. That is to say, there is always the possibility that the assets’ fair value will drop below their fair values at some point.
PLBY goes on to clarify why such impairment losses on digital assets might not be recoverable at all. This is the case even when the assets recover some of their previous worth after suffering a loss. A portion of the filing states in part:
“As a result, adverse movements in the market price of Ethereum might potentially have a significant influence on the earnings of the company as well as its carrying value.”
In the meantime, the corporation disclosed the one and only circumstance in which an increase in price has the potential to benefit the company’s earnings.
According to the document, this can only occur if the Ethereum held in the company’s balance sheet is sold for a profit.
According to the statistics provided by TradingView, the value of Ethereum had decreased by around sixty percent since October 2021, when PLBY introduced its “Rabbitar” non-fungible token concept.
It is important to note that Playboy is not making their debut in the NFT market with the Rabbitars NFT, as this is not its first attempt in this market.
Before beginning work on the project, the business conducted an NFT drop in early 2021 under the name “Liquid Summer.”
Playboy is also interested in the technology behind blockchains. In 2018, it made its initial foray into the blockchain technology sector of the industry. When that happened, Playboy TV became the first Playboy platform to take bitcoin purchases; in June, the service was brought online at Playboy.com.
Also, the corporation unveiled the MetaMansion project in February, which signaled its intention to transition to the metaverse.
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