Hey There Income Hunters,
So, my two twenty-something kids came to Tampa for a visit a couple of weeks ago and every night before bed we would watch an episode of HBO’s Entourage …
One night, an episode revolving around the Playboy Mansion was on and my son asked me if Hugh Hefner is still alive
I told him Hefner died in 2017. #RIPHugh
Hef passed away a year after selling the Playboy mansion for a cool $100 million. He bought it for $1.1 million in 1971.
Talk about living and trading with passion. HH takes the prize, for sure — money, women, cars, a media empire and more.
I wonder sometimes if Hefner could rise to the same heights today, but that’s a different discussion …
Regardless, Hugh’s legacy and the Playboy Bunny live on … and I think the sequel is going to be even bigger than the original …
Playboy has the potential to be the most successful special acquisition company (SPAC) of all time.
It already made me a quick 15% yesterday — and I will get back in very soon because I think this is one to hold for a couple of years. At least!
Playboy Group Inc (Ticker: PLBY)
PLBY went public back in February via a SPAC merger with Mountain Crest Acquisition Corp. (Ticker: MCAC) …
This is PLBY’s second stroll down Wall Street after going private in 2011.
The company’s CEO Ben Kohn will retain his current post — and he has big plans.
Kohn has smartly established four diversified and forward-looking focus categories: Sexual Awareness, Style & Apparel, Gaming & Lifestyle and Beauty & Grooming.
Playboy is one of the most desirable and sexiest brands (literally!) in history …
For most of my life, Hugh Hefner and his magazine were considered icons. (Heck, I would always gamble at the Playboy casino in Atlantic City, back in the day.)
It goes public with incredible global brand awareness in place.
Playboy is still one of the top-20 licensed brands in the world — ranked higher than the NBA and just below the NFL.
A Brand Like No Other
Early on, the Playboy SPAC was being compared to the Hims & Hers Health (Ticker: HIMS) …
However on HIMS Kohn said, “They are spending tens of millions of dollars trying to build a brand and acquire customers. We reach 50 million people everyday through our social-media channels.”
Look at this way … Nike, Apple, Coke and P&G are also top-20 brands globally and they have market values in the hundreds of billions.
PLBY earns $3 billion in global sales each year, with half coming from China, where they have a casino in Macau.
What’s insane is they only took in $61 million in royalty income on the $3 billion in sales.
That’s a 2% royalty rate!
Under a refocused brand they could easily triple that.
PLBY + NFT?
Kohn didn’t take long to enter the NFT arena, quickly made a deal with digital-art firm Nifty Gateway to sell the magazine’s iconic photos, artwork and more — all through NFTs.
Can you imagine the treasure trove of sought-after gems they can find in their archives?
Some in the research arena put a 10-bagger price tag on PLBY over a three year period — and it’s not off to a bad start …
The Quick Flip
Still, I had to flip PLBY back out yesterday after a 15% rise.
Here’s why …
I’ve learned from Option Pit CEO Mark Sebastian to look at the volatility of a specific stock derived from an in-the-money (ITM) straddle. (The best place to see Mark in action each day, by the way, is our Option Pit Pro Chat Room.)
In PLBY, the straddle for 30-days was priced at $15. After getting that move by noon, I just closed it out.
The chart below illustrates my early purchase (green circle) right after the bell and my sale (red circle) just before noon …
Bring It Home
What an incredible market …
I am sure as #IncomeHunters, we would love this to last for years.
And you never know, it may have some legs as long as inflation cooperates and we get the vaccines distributed with no major disasters.
Finding good companies that are trading at a reasonable price gives you a great chance for a quick strike and a kill.
I’m looking at another good prospect and that I will let you in on tomorrow.
Have a great day and, as Hef did …
Live and Trade With Passion My Friends…