- Playboy accepted ether (ETH) as a payment method for its NFT collections.
- According to its annual report, the company has incurred a $4.9 million impairment loss.
Many mainstream companies are still reaping the horrors of the 2022 crypto winter, finding new leaky holes in their ship. In an annual report shared by the raunchy lifestyle magazine, Playboy found a massive $4.9 million gap in its balance sheet.
The main culprit? The ether (ETH) Playboy accepted as payment for NFTs.
Still Cold from Winter
Playboy Group, the parent company of the iconic Playboy magazine, announced that it incurred an impairment loss of $4.9 million on the ether (ETH) it accepted as payment for the Rabbitars NFT collection.
According to an annual report shared on March 16, 2023, the lifestyle company still holds the NFT collection as digital assets in its balance sheet. The value of said digital assets sits at $327,000 as of December 31, 2022.
According to a filing shared on November 9, 2022, the same digital assets were worth $1.74 million as of September 30, 2022. The media company’s digital assets lost 81% of their value between the quarters due to market conditions.
Additionally, in the report, Playboy explained that it classifies its digital assets as “indefinite-lived intangible assets.” These assets are subject to impairment losses due to market conditions and other factors.
The impairment loss the company takes on these assets can’t be recovered even if they rise in value. This is because of accounting rules that require Playboy to note the value of these assets to their “fair value.”
The only way a price gain can positively impact the company’s earnings is when the ether held on the balance sheet is sold at a profit, the filing said.
Still, a Long Way to Go
Playboy launched its Rabbitar NFT collection on October 20, 2021, at the height of the NFT craze. Since then, ether has lost approximately 55% of its value, according to CoinMarketCap.
According to Playboy’s annual filing, the carrying value of its digital assets held in 2021 was worth $6.8 million. However, despite incurring significant losses, the raunchy media company is still HODLing its assets and making web3 experiences with leaders in the space.
On the Flipside
- The cheapest Rabbitar costs 0.0702 ETH, or approximately $122, whereas the most expensive Rabbitar costs 1,337 ETH, converting to roughly $2.3 million.
Why You Should Care
Playboy is one of the first mainstream companies vocal about adopting cryptocurrencies in its operations. The company is also one of the few that continues to create new experiences despite incurring losses.
Read about Playboy’s NFT collections:
Playboy Returns to The Sandbox, Launches First NFT Collection
Find out more about The Sandbox’s new partnership:
The Sandbox to Roll Out New Experience with Havas Play