The parent company of Playboy, PLBY Group, has reported an impairment loss of $4.9 million on Ethereum it held last year.
The loss occurred during the crypto winter period, where the broader market prices saw a significant decline. The company had accepted Ethereum as payments for its “Rabbitars” non-fungible tokens (NFTs), which it holds on its balance sheet as digital assets.
The value of the digital assets sat at $327,000 as of last year, down from $1.75 million the previous year. 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.
“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 company explained.
The company launched its “Rabbitar” NFT project during the peak of the crypto market in October 2021. Since then, Ether, the native token of Ethereum, has lost about 60% in value according to TradingView data.
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.
Playboy’s “Liquid Summer” NFT drop was another venture by the company into the world of digital assets. The NFT drop was a collection of digital artworks created in collaboration with the artist Slimesunday, featuring archival photographs of Playboy model Lenna Sjööblom, the “First Lady of the Internet.”
The company’s foray into digital assets began in 2018 when Playboy TV started accepting bitcoin payments. The bitcoin payments expanded to Playboy.com in June.
