Pop Mart shares fell the most since April on Monday amid fears that the success of Labubu, a fluffy elf doll with a wide smile, is running out of steam, the Financial Times reports, writes UNN.
Details
Since last Monday, the company's shares have lost more than 10%, although they are still up more than 180% since the beginning of the year.
Pop Mart's impressive stock market growth has made it one of the most valuable toy companies in the world. The company's market capitalization is more than double that of Hasbro and Mattel combined, even after the recent decline. Much of the company's success has been driven by the global popularity of Labubu, an "ugly but cute doll" that has earned the approval of celebrities such as David Beckham and Rihanna, the publication writes.
However, analysts warn that Labubu's success could make the company dependent on a potentially temporary trend, and say it needs to continue releasing new popular characters to maintain its valuation, which is now about 29 times its annual profit.