Playboy loses nearly $5 million in one year from the depreciation of Ethereum following the sale of NFT
Playboy lost nearly $5 million in 2022 from Ethereum impairments from NFT sales
The net book value of the company's digital assets fell to $327,000 as of December, which was $6.8 million a year earlier
PLBY Group, the parent company of Playboy magazine, said it suffered a loss of $4.9 million from asset impairment in Ethereum (ETH) in 2022, according to its annual report. The company was accepting the leading altcoin as payment for its 2021 Rabbitars collection NFTs.
The company received $7.8 million in digital assets from the sale of NFTs in 2021 but recorded a $1 million impairment loss at the end of that year. At the end of 2022, the value of digital assets on Playboy's balance sheet was $327,000.
"Our digital assets as of December 31, 2022, and 2021 consisted of Ethereum cryptocurrency generated from the sale of our non-exchangeable Rabbitar tokens. The impairment charges on our digital assets for the years ended December 31, 2022, and 2021 were $4.9 million and $1 million, respectively," the report said.
"The market price per Ethereum fluctuated between $964 and $3,813 during 2022, but the book value of each Ethereum we owned at the end of the reporting period reflects the lowest price per Ethereum on the exchange at any time since its receipt," the statement said.
Therefore, negative fluctuations in the market price of Ethereum could have a significant impact on the company's revenues and book value, while price increases will have a positive impact on the company's revenues only if the tokens on the balance sheet are sold at a profit, the statement said.
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