Playboy: The Asset-Light Transformation, Margins, And Dilution
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Pacifica Yield13.43K FollowersFollow5ShareSaveCommentsSummaryPlayboy's shift to a more asset-light business model has seen the company's gross profit margins and adjusted EBITDA meaningfully improve.The company ended the third quarter with a strong cash position, but one built on the back of intense shareholder dilution. PLBY's weighted-average shares outstanding jumped by 51% year-over-year.Cash burn improved meaningfully, which could mean constrained downstream dilution even as total debt stood at $177 million at the end of the third quarter. crisserbug/iStock Unreleased via Getty Images While Playboy's (PLBY) 51% year-to-date rally has powered the once moribund brand to incredible highs, the company faces a liquidity position that's only been bolstered by the radical dilution of shareholders. The market has so farThis article was written byPacifica Yield13.43K FollowersFollowThe equity market is a powerful mechanism as daily fluctuations in price get aggregated to incredible wealth creation or destruction over the long term. Pacifica Yield aims to pursue long-term wealth creation with a focus on undervalued yet high-growth companies, high-dividend tickers, REITs, and green energy firms.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Quick InsightsWhat would spark a continued rally of Playboy's common shares?Continued gross margin gains and improved profitability would be helpful if paired with the company reversing its revenue dip.Recommended For You