Shares of PLBY Group (PLBY -2.33%), which describes itself as a pleasure and leisure company, fell as much as 15% in early trading today. The stock pared that loss to 11% by 10:30 a.m. EDT or so. There are conflicting trends here.
On April 6, PLBY Group announced that it was inking a partnership with Nifty Gateway, which operates a non-fungible token (NFT) exchange. The general idea is to use PLBY's historical content from Playboy magazine to create content in conjunction with outside artists that can then be sold as NFTs. The NFT space has been a pretty hot area of late, so investors were quick to bid up the stock on the news. Thus today's pullback isn't shocking given the previous day's gains. It's not unusual for investors to take profits after a large price spike.
That said, Roth Capital increased PLBY Group's price target today, citing the move into the NFT space. While maintaining a buy rating on the stock, the analyst took the price target from $26 per share to $35. Including today's pullback, the stock is trading around $26, suggesting a roughly 33% upside in the stock. Investors often bid a company's stock price up on price target upgrades, but in this situation there were other issues for investors to digest, and the analyst move didn't have the impact that one might normally expect.
PLBY Group has been public only since early February, following a blank check IPO. The stock, including today's drop, is up over 90% in roughly two months. The NFT move is an interesting one for a company with legacy print content that has been trying to adjust to a digital world, which is encouraging. However, given the special purpose acquisition corporation (SPAC) excitement that's been driving the share prices of blank check IPOs like this one, it might be best for long-term investors to watch PLBY Group for a little while longer before stepping aboard. Indeed, it hasn't even reported its first full quarter as a public company yet (which won't actually happen until it reports second-quarter results, given the mid-first-quarter timing of its IPO).