Playboy, the media and lifestyle company founded by the late Hugh Hefner, has suffered a massive impairment loss of $5 million on its Ethereum holdings from last year, according to an annual filing on Thursday. The company attributed the loss to the prolonged crypto winter that hit the broader market, causing a significant decline in cryptocurrency prices.
During the peak of the crypto market in October 2021, Playboy announced its “Rabbitar” NFT project, which accepted Ethereum as payments. However, according to TradingView data, Ether, the native coin of Ethereum, has lost over 60% of its value since then, leading to the company’s $5 million loss.
The parent company of Playboy, PLBY Group (PLBY), stated that it took an impairment loss of $4.9 million on the Ethereum it held last year, as crypto winter saw a significant decline in the broader market prices. The company accounts for its digital assets, including the NFTs, as “indefinite-lived intangible assets,” which are subject to impairment losses if their fair value falls below their carrying value, at any time.
According to the filing, the value of Playboy’s digital assets was $327,000 as of last year, significantly lower than the $1.75 million recorded in the previous year’s filing. The company explained that the impairment losses on its digital assets cannot be recovered, even if the fair value of the assets rises after taking the impairment losses.
“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,” according to the filing.
