Home » sex sin stocks » BREAKING NEWS: Playboy’s Hugh Hefner Is Dead. What Now For Playboy?

Playboy. Just the name itself creates an image in your mind — not just of naked centerfolds but of an entire lifestyle.

And at the center of the lifestyle is Playboy’s creator, Hugh Hefner.

In Chicago in 1953, “Hef” borrowed $1000 from his mother (along with money from other sources) and founded the magazine, then grew it into a dominant global brand that includes print, digital, social, mobile, TV and radio platforms.

As reported today (September 27), Hugh Hefner passed away at the age of 91. At the time of his death, his net worth is reported to be $43 million but, in our opinion, is likely more.

Is Playboy Publicly Traded?

For 40 years, Playboy was a publicly traded sex sin stock.

During that time it saw tremendous growth and became a massive global, earning more money from its licensing than from its many country-specific magazine publications.

However, Playboy struggled (perhaps in part due to internet growth and the widespread availability of nude pictures). In fact, according to The Telegraph, Playboy’s value plummeted from $1 billion in 2000 to just $84 million in 2009.

Not surprisingly, in 2010, the process to take the company private began to pick up steam. Interestingly, at this time, Penthouse owner and sex sin stock FriendFinder Network (FFN) offered to buy the company but Hef refused to sell.

By June 2011, all outstanding shares were purchased by a private equity company, Rizvi Traverse Management LLC and Playboy became a private company.

Although Playboy is a private company, we can make some educated guesses about its success and it’s our belief that the company continues to struggle. In fact, throughout 2016 and part of 2017, Playboy magazine focused more on the lifestyle aspect of its brand and didn’t publish any nude photos; it returned to its roots in the March/April 2017 issue.

Yes, we used “struggle” in the paragraph above but that is relative, since the company likely still makes tens of millions of dollars to hundreds of millions of dollars a year on publishing and licensing… but just nowhere near its level of success in its heyday.

What Does This Mean For Investors?

Playboy is not a publicly traded sex sin stock at this point, so investors may believe that they are not impacted.

However, we believe that investors should watch for a change to come:

Now that Hugh Hefner has passed away, and his son is at the helm of the private company, they have a choice. How long will they want to run the company as-is? They may fear running the company into the ground, or they may want an influx of cash to innovate their brand and pursue new opportunities. If that’s the case, Playboy may yet become a publicly traded company once again. (We believe that change will come within the next year or two, as the leaders of the company will want to reverse the declines with bold thinking that may have been prohibited when Hef was alive.)

Will they do an IPO, the way traditional publicly traded companies go public?

Will they do a reverse IPO, the way Penthouse went public “through” FriendFinder Network (FFN)?

Will FriendFinder Network (FFN) try again to buy Playboy?

Will some other publicly traded company acquire Playboy? Consider this: Playboy may be associated with centerfolds but it is an extremely strong brand that could be a valuable asset to a company with cash and the drive to take this brand in creative new directions.

What if Amazon (AMZN) bought Playboy? They are acquisition-hungry right now and they see the value of strong brands. Many of their brands are family-friendly but Playboy gives them interesting worldwide exposure to a target audience that is affluent.

What if Netflix (NFLX) bought Playboy? Both of those companies produce content, and Netflix may not be in acquisition mode but it could easily transition Playboy into an adult version of Netflix.

Even a struggling publisher that could put together the cash might be able to get its hands on Playboy to help get its authors in front of a new audience.

Or a lifestyle brand that wanted to reach an affluent market — a company like BMW might be a perfect fit to acquire Playboy but publish it at arm’s length.

Another possible change is a continued decline of Playboy while other new entrants in the market take advantage of Playboy’s weakness.

Therefore, if you’re an investor, nothing changes right now. But watch for changes in the near future. Maybe nothing will happen… but we believe a change just might be coming in the next couple of years and you should be ready.

Sources:
Wikipedia/Playboy
Wikipedia/Playboy Enterprises
Wikipedia/Hugh Hefner
PR Newswire
Business Insider
The Telegraph

DISCLAIMER

Nothing on this site is a recommendation because, hey, I can't read your mind and I don't know what you have in your portfolio, and I'm not a licensed financial advisor. So never EVER trade without doing your due diligence. If you want more information about this fascinating topic, please check out the Sin Stocks Disclaimer page which basically says the same thing but more emphatically.