Looks like it's time for Hugh Hefner to break out the red velvet smoking jacket and pour himself a celebratory martini. The Playboy
The offer to cash out shareholders at $5.50 per share is a nearly 40% premium to where the stock closed the weekend. Investors -- as well as Playboy's board -- will now need to decide whether Hefner's willing to go higher, or whether they even want an exit strategy in the first place. For their sake, I hope they realize that greed isn't as attractive as it used to be.
Playboy has suffered in recent years, culminating in last month's restructuring, which aims to airbrush away roughly $3 million a year in overhead during the downsizing process. The company with the iconic bunny mascot has posted losses in 10 straight quarters.
Playboy has tried to doll itself up as a global brand worth licensing. It's teaming up with Las Vegas Sands
At first, Playboy's brand helped crack open new media markets outside of its print publications, with a presence everywhere from pay-per-view to Playboy channels on cable and Sirius XM Radio
Playboy's digital revenue took an 11% hit in its latest quarter, even compared to last year's depressed levels.
Rule Breakers originally recommended Playboy shares several years ago, on the strength of its branding potential. David Gardner finally threw in the flag two summers ago, urging subscribers to bail on the company.
Regardless of how things pan out with this morning's privatization offer, it was the right call. Playboy's days as a growth company are gone. Even when it tries to revive itself -- by launching whitewashed apps through Apple's
The retro charm of Playboy's brand may hold up well in gaming establishments and a handful of other licensing opportunities, but the company appears destined to follow its print-magazine circulation in a gradual slide toward irrelevance.
Shareholders? Take the $5.50 and run.
Longtime Fool contributor Rick Munarriz has never graced the centerfold of any magazine. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.