The NFT space may ultimately prove to be the “most important thing about the crypto revolution” over time. It has already emerged as one of the most interesting trends across markets in 2021.
The question that arises in the wake of this interest is: Is this all just a fad – a short-lived craze that has no serious staying power or important role in the economy of the future?
We would suggest one read recent work from thought leader Jesse Walden of Variant Fund, who put out an eloquent exploration of the NFT boom ahead in his piece “NFTs Make the Internet Ownable”.
The gist of the piece is that NFTs make the rest of the economy ownable – seeing as how everything but shared digital assets was already ownable before the rise of the NFT concept.
The addition thus provided is a huge one: all photography, art, music, journalism, and literature occurring online is basically in this territory. It’s more or less the whole of the content universe we consume each day.
And it’s actually so much more than that because it also represents individual pieces of other larger content assets that were already owned but can now be pieced off and auctioned to create separate value, including iconic sports highlights, historic interview clips, astounding live performances, and other “moments” of culture.
But that isn’t the whole picture. Once we have established this new mechanism for value assignment, whole industries will emerge or mature around that concept to capitalize on it. At the end of the day, this is likely to be far from a short-lived craze.
Given that view, we would suggest taking a closer look at some of the stocks in the NFT space, including Plby Group Inc (NASDAQ: PLBY), Hollywall Entertainment Inc (OTC US: HWAL), and Oriental Culture Holding Ltd (NASDAQ: OCG).
PLBY Group Inc (NASDAQ: PLBY) frames itself as a company that connects consumers around the world with products, services, and experiences to help them look good, feel good, and have fun. PLBY Group serves consumers in four major categories: Sexual Wellness, Style & Apparel, Gaming & Lifestyle, and Beauty & Grooming.
PLBY Group’s flagship consumer brand, Playboy, is one of the most recognizable, iconic brands in the world, driving billions of dollars in consumer spending annually across 180 countries.
PLBY most recently announced recent financial performance data, including revenue growth of 34% year-over-year to $42.7 million, driven by 114% growth in direct-to-consumer revenue in the comparable period, a net loss of $5.0 million, largely due to a $13.8 million year-over-year increase in selling and administrative expenses, and adjusted EBITDA of $6.7 million, burdened by an additional $1.5 million of one-time expenses related to M&A transaction expenses, severance, and COVID testing at the Company’s fulfillment center, none of which were added back to arrive at adjusted EBITDA.
Ben Kohn, Chief Executive Officer of PLBY Group, stated that he was “thrilled by the recent performance of our first NFT art drop, a symbol of the infinite product experiences we can build off the back of our iconic flagship brand and rich archive. We are in the early innings of unlocking the tremendous potential of our intellectual property and global fan base and remain focused on investing today in opportunities to drive superior long-term growth and deliver substantial long-term value for our shareholders.”
Even in light of this news, PLBY hasn’t really done much of anything over the past week, with shares logging no net movement over that period. Shares of the stock have powered higher over the past month, rallying roughly 42% in that time on strong overall action.
Hollywall Entertainment Inc (OTCMKTS: HWAL) is a diversified player with active commercial interests in multiple fast-growing industries and ties to major themes including 5g infrastructure, internet-of-things, and proprietary high-value entertainment assets.
In a recent company communication, HWAL was described as a company with a portfolio of operating subsidiaries spanning various industries, including infrastructure development, 5G and telecommunications, broadcasting, education, media, and entertainment.
However, for our purposes today, the real topic is HWAL’s music rights portfolio, which was recently valued at nearly $150 million. This basket of legends includes the rights to manufacture and distribute over 17,500 master recordings performed by such legends as Ray Charles, Ella Fitzgerald, The Jackson 5, Frank Sinatra, Dolly Parton, Elvis Presley, Tony Bennett, The Bee Gees, Chicago, Platters, George Gershwin, Marvin Gaye, James Brown, Nat King Cole, John Lee Hooker, Willie Nelson, Rod Stewart, Hall and Oates, James Taylor, Etta James, Aretha Franklin and many other multiple platinum-selling acts.
Hollywall Music Library has been preserved for over 20 years and contains some of the rarest and most coveted unpublished recordings from countless Legendary Music Recording Artists. The company is now taking this further and developing a one-of-a-kind, state-of-the-art, digital distribution and verification system- designed to maximize customer delivery, quality control, and revenues for artists, writers, content developers, copyright owners, and shareholders.
Hollywall Entertainment shares have pulled back to key support in the $2/share area, where the stock has found stable buying interest to give it support over the past two months. That forms a potentially important technical basing pattern that could be triggered by an upside breakout if momentum in the NFT theme re-emerges.
Oriental Culture Holding LTD (NASDAQ: OCG) trumpets itself as an online provider of collectibles and artwork e-commerce services, which allow collectors, artists, art dealers and owners to access an art trading market with a wider range of collectibles and artwork investors.
Through its subsidiaries in Hong Kong, the Company provides trading facilitation for individual and institutional customers of all kinds of collectibles, artworks and certain commodities on its online platforms, as well as online and offline integrated marketing, storage and technical maintenance service to customers in China.
OCG most recently announced its financial results for the fiscal year ended December 31, 2020, including operating revenues up by $4.0 million (or 29.7%) year-over-year to $17.4 million, gross profit at $14.8 million in 2020 as compared to $12.1 million in 2019, representing a 22.1% growth from the same period in 2019, and net income at $2.0 million in 2020, a decline of $7.1 million or 77.5% from $9.1 million in the same period of 2019.
Mr. Lewis Wan, Chairman of the Board of Directors of the Company commented, “As Covid-19 vaccines become available to wider community in the world, we believe a global economic recovery in 2021 is around the corner. With quantitative easing and low-interest rate, capital flow and world economy will likely head for a change. We believe that as money pours into the market as a common tool to stimulate economic growth, the scarcest asset will not be cash but real, liquid assets, especially those are valued in RMB considering the growth in China. The products traded on OCG’s platforms are both valued in RMB, and are liquid assets that worth investing in with high collection values.”
Even in light of this news, OCG has had a rough past week of trading action, with shares sinking something like -5% in that time. That said, chart support is nearby, and we may be in the process of constructing a nice setup for some movement back the other way. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -7%.
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