What happened

Shares of PLBY Group (PLBY -2.54%), which describes itself as a pleasure and leisure lifestyle company, rose sharply in the first few minutes of trading on Tuesday, gaining just over 26% at one point. Roughly an hour into the trading day, the stock had given back a fair amount of that gain, but was still higher by a more-than-respectable 14%. The company's third-quarter earnings update, which hit the market after it closed on Monday, was the likely cause of this morning's excitement.

So what 

The truth is that PLBY Group's third quarter 2021 earnings update was not solely filled with good news; the company lost $0.18 per share versus a profit of $0.05 in the same quarter of 2020. That said, revenue was higher by 67% year over year, with direct-to-consumer (DTC) sales up 139% and licensing revenue (the company owns the Playboy brand) higher by 14%. The weak bottom line was really a function of the added costs of going public and acquisition-related expenses as the company builds up its DTC business. 

A person stacking blocks that spell NFT.

Image source: Getty Images.

However, the real reason investors remain upbeat is likely that PLBY Group is getting set to launch new products and services. Notably, it will soon be opening a platform for creators that will use a subscription-based model. And the company is launching offerings in the hot non-fungible token (NFT) space, looking to build off the iconic Playboy brand. While there's no way to know how these opportunities will play out, investors remain excited about the potential. And that was on clear display today.

Now what

PLBY Group is making some interesting moves in a unique space, notably tilted toward adult audiences. The Playboy name should help it in this regard. That said, the company hasn't been public for very long (it went public in February via a merger with a blank check company), and the outcome from its digital efforts is, at best, uncertain today. Most investors will probably be better off watching PLBY Group from the sidelines for now to see how things proceed before jumping in early here.