Yet another pop culture fad has claimed another victim: Pop Mart, the company behind those Labubus you saw hanging off everyone’s purse last year, has suffered a massive stock drop, Bloomberg reports.
The stock plunged more than 30% over five sessions through Tuesday after the company’s earnings results showed a rising dependence on the snaggle-toothed monster dolls. That extended a drop from its record high in August to nearly 60%, wiping out about $33 billion from its market cap.Pop Mart’s latest earnings tipped market sentiment decisively bearish. A wave of price‑target cuts, rising short interest, and a stock slide that persisted despite multiple buybacks signal growing concerns over the company’s ability to replicate Labubu’s success with other products.
The China-based Pop Mart stock soared 300% last year as the Labubu craze hit everywhere, but they’ve been unable to find another smash. Their new lines, Crybaby and Molly, have failed to catch fire, and they are trying to capture the magic again with new characters Skullpanda and Twinkle Twinkle, and collabs with Sanrio and FIFA.
Last year Labubus were all the rage, part of the blind box craze. A life-sized Labubu even sold for $170,000 at a Labubu art auction hosted by Yongle Auction in China. Pop Mart stores have sprung up around the nation, including a boutique at Macy’s last time I was there. But now, the stock is languishing.
Even cheaper valuations and stock buybacks are not enough to lure investors. Pop Mart has purchased around HK$1.3 billion ($166 million) worth of shares since a record daily drop of 23% on March 25. The stock now trades at a record low level of 10.3 times forward earnings, compared with its three-year average of 24 times.
Analysts quoted by Bloomberg are not bullish on Pop Mart given their large inventory, failing sales worldwide and IP fatigue.
The Labubus are just the latest in a long history of troll-like dolls that fuel fads, from Cabbage Patch kids to Beanie Babies. While Pops aren’t as monster-y, they share the large head and wild eyes that always seem to be at the heart if such trends. And we all know what happened to Funko. You’d think people would have learned by now that such fads never last. But they haven’t, and they won’t, and it will all happen again.
