Shares of PLBY Group (PLBY -0.21%), which calls itself a pleasure and leisure company, but is probably best known as the owner of Playboy magazine, rose a dramatic 19% in the first hour or so of trading on Tuesday. There was little question as to why, as the company just announced that it plans to jump into the non-fungible token (NFT) space.
Put simply, PLBY Group is looking to mine the archives of its Playboy content to create digital art that will be sold on Nifty Gateway, an NFT trading platform. Although the art will be based on Playboy images, it will be created by artists such as Slimesunday and Blake Kathryn. The company intends to cultivate more artist relationships in the future. While each artist will create a unique series, the overall project will fall under the label of "Playboy x Nifty." The NFT space is fairly hot right now, so it makes sense that PLBY Group shares rose on the news.
From a business perspective, this is an interesting effort to refresh older content so that it can be sold anew. Assuming the project gains traction, which is not guaranteed, it could create a new income stream for the company. It might also reinvigorate the Playboy brand, which is culturally iconic, but lacks modern relevance. So, yes, this appears to be a solid move for PLBY Group, and investors are probably right to be excited.
The only fly in the ointment for PLBY Group is that the NFT space has cooled considerably in a very short period of time. It could well be that the Playboy x Nifty partnership will be showing up too late to an extremely brief party. Only time will tell. That said, PLBY Group is clearly willing to be creative and embrace both change and technology, which is a fact that long-term investors should probably keep in the backs of their minds -- even if this specific effort doesn't live up to expectations.