Playboy Group started accepting Ethereum for NFT purchases however, it ended up losing $4.9 million after allowing this form of payment. As of December 2022, the company is said to have a net carrying value of digital assets worth $327,000.
The parent company of Hugh Hefner's Playboy enterprise said it suffered a heavy financial loss of the mentioned amount on the ether (ETH) that it held last year at a time when the crypto winter generated a substantial decline in the broader market prices, which led to the drop in cryptocurrency prices.
As per CoinDesk, Playboy, which is a well-known lifestyle and media company, explained it accepted ETH as payments for its “Rabbitars” NFTs that were released in 2021. As stated in its annual filing last week, the non-fungible token is the company’s digital asset, with a value of $327,000 as of December of last year. In its previous filing, the company stated that its digital assets, which it refers to as Ethereum, were worth $1.75 million as of September 2022.
“The market price of one [ether] in our principal market ranged from $964 to $3,813 during the year ended Dec. 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,” Playboy stated in it latest filing.
The company added, "Therefore, negative swings in the market price of Ethereum could have a material impact on the company's earnings and carrying value while the only time a rise in prices will impact the company’s earnings positively, is when the Ethereum is held in the balance sheet, are sold at a gain."
BitCoinist reported that Playboy dropped its “Rabbitar” NFT two years ago, and based on data from TradingView, Ether crypto coin lost more than 60% of its value since then due to crypto winter. Unfortunately, Playboy has been accepting ETH as payment for its Rabbitars NFTs, and this explains its multi-million losses.