PLBY Group Converts 25% of Preferred Shares to Common at $1.85 Per Share

Rhea-AI Summary

PLBY Group (NASDAQ: PLBY) has announced the conversion of 25% of its Series B Convertible Preferred Stock into common stock as part of its balance sheet streamlining and deleveraging strategy. The company converted 7,000 shares of Series B Stock into 3,784,688 common shares at a conversion price of $1.85 per share, representing a 23% premium to the December 2024 securities purchase agreement with Byborg Enterprises SA.

Following the conversion, PLBY Group's outstanding Series B Stock decreased to 21,000.00001 shares, with total common stock outstanding reaching 93,736,325 shares. The company received no proceeds from this conversion but maintains the option to convert additional Series B Stock or redeem it for cash in the future based on common stock price performance.

Positive

• Conversion price of $1.85 represents a 23% premium to recent securities purchase agreement
• Strategic deleveraging of balance sheet through preferred stock conversion
• Maintains flexibility for future conversions or cash redemptions

Negative

• Significant dilution with 3,784,688 new common shares issued
• No proceeds received from the conversion

Insights

Financial Restructuring Analyst

The strategic conversion of 25% of PLBY Group's Series B Preferred Stock marks a significant step in the company's financial restructuring efforts. Converting 7,000 preferred shares into 3,784,688 common shares at $1.85 per share demonstrates several key implications:

The conversion price's 23% premium over December's securities purchase agreement with Byborg Enterprises SA signals market confidence in PLBY's valuation. This transaction effectively reduces preferred dividend obligations and simplifies the capital structure, though it does create dilution for existing shareholders.

The move carries strategic significance beyond the immediate balance sheet impact. By reducing preferred shares to 21,000, PLBY gains more financial flexibility while potentially decreasing fixed dividend commitments. The company's indication of possible future conversions or cash redemptions suggests a methodical approach to capital structure optimization.

From a leverage perspective, this conversion represents a calculated trade-off. While it increases the common share count to 93.7 million shares, it reduces the senior claims on the company's cash flows. This could improve PLBY's financial flexibility and potentially lower its weighted average cost of capital.

The transaction's timing and structure suggest management's confidence in the company's underlying value proposition, as they're willing to execute the conversion at a premium to recent market prices. This could be interpreted as a positive signal regarding the company's operational trajectory and future growth prospects.

Part of Continued Streamlining of Balance Sheet and Deleveraging of Company

LOS ANGELES, Jan. 31, 2025 (GLOBE NEWSWIRE) -- PLBY Group, Inc. (NASDAQ: PLBY) (“PLBY Group” or the “Company”), owner of Playboy, one of the most recognizable and iconic brands in the world, today announced that it has converted 25% (the “Conversion”) of its outstanding shares of Series B Convertible Preferred Stock (the “Series B Stock”) into shares of its common stock (the “Common Stock”) as part of an ongoing streamlining of the balance sheet and deleveraging of the Company.

The Company converted 7,000 shares of its 28,000.00001 Series B Stock into 3,784,688 shares of the Company’s Common Stock at a conversion price of $1.85 per share in accordance with the terms of the Series B Stock. The conversion price represents an approximate 23% premium to the price per share in the securities purchase agreement that the Company entered into with Byborg Enterprises SA in December 2024. As a result of the Conversion, the Company reduced the number of shares of Series B Stock outstanding to 21,000.00001 shares and had 93,736,325 shares of Common Stock outstanding. The Company did not receive any proceeds in connection with the Conversion.

The Company may elect to convert additional Series B Stock in the future based on the Common Stock price and/or redeem additional Series B Stock for cash.

About PLBY Group, Inc.

PLBY Group, Inc. is a global pleasure and leisure company connecting consumers with products, content, and experiences that help them lead more fulfilling lives. PLBY Group’s flagship consumer brand, Playboy, is one of the most recognizable brands in the world, with products and content available in approximately 180 countries. PLBY Group’s mission—to create a culture where all people can pursue pleasure—builds upon over 70 years of creating groundbreaking media and hospitality experiences and fighting for cultural progress rooted in the core values of equality, freedom of expression and the idea that pleasure is a fundamental human right. Learn more at http://www.plbygroup.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ from their expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect”, “estimate”, “project”, “budget”, “forecast”, “anticipate”, “intend”, “plan”, “may”, “will”, “could”, “should”, “believes”, “predicts”, “potential”, “continue”, and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, the Company’s expectations with respect to future performance, growth plans and anticipated financial impacts of its strategic opportunities and corporate transactions. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from those discussed in the forward-looking statements. Factors that may cause such differences include, but are not limited to: (1) the inability to maintain the listing of the Company’s shares of common stock on Nasdaq; (2) the risk that the Company’s completed or proposed transactions disrupt the Company’s current plans and/or operations, including the risk that the Company does not complete any such proposed transactions or achieve the expected benefits from any transactions; (3) the ability to recognize the anticipated benefits of corporate transactions, commercial collaborations, commercialization of digital assets, cost reduction initiatives and proposed transactions, which may be affected by, among other things, competition, the ability of the Company to grow and manage growth profitably, and the Company’s ability to retain its key employees; (4) costs related to being a public company, corporate transactions, commercial collaborations and proposed transactions; (5) changes in applicable laws or regulations; (6) the possibility that the Company may be adversely affected by global hostilities, supply chain delays, inflation, interest rates, foreign currency exchange rates or other economic, business, and/or competitive factors; (7) risks relating to the uncertainty of the projected financial information of the Company, including changes in the Company’s estimates of cash flows and the fair value of certain of its intangible assets, including goodwill; (8) risks related to the organic and inorganic growth of the Company’s businesses, and the timing of expected business milestones; (9) changing demand or shopping patterns for the Company’s products and services; (10) failure of licensees, suppliers or other third-parties to fulfill their obligations to the Company; (11) the Company’s ability to comply with the terms of its indebtedness and other obligations; (12) changes in financing markets or the inability of the Company to obtain financing on attractive terms; and (13) other risks and uncertainties indicated from time to time in the Company’s annual report on Form 10-K, including those under “Risk Factors” therein, and in the Company’s other filings with the Securities and Exchange Commission. The Company cautions that the foregoing list of factors is not exclusive, and readers should not place undue reliance upon any forward-looking statements, which speak only as of the date which they were made. The Company does not undertake any obligation to update or revise any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based.

Contact:

Investors: FNK IR – Rob Fink / Matt Chesler, CFA – investors@plbygroup.com 

Media: press@plbygroup.com

FAQ

How many shares of Series B Preferred Stock did PLBY convert to common stock in January 2025?

PLBY Group converted 7,000 shares of Series B Preferred Stock, representing 25% of its outstanding Series B shares, into 3,784,688 common shares.

What was the conversion price for PLBY's Series B Preferred Stock conversion?

The conversion price was $1.85 per share, representing a 23% premium to the December 2024 securities purchase agreement with Byborg Enterprises SA.

How many common shares does PLBY Group have outstanding after the January 2025 conversion?

After the conversion, PLBY Group had 93,736,325 shares of common stock outstanding.

How many Series B Preferred shares remain outstanding for PLBY after the conversion?

After the conversion, 21,000.00001 shares of Series B Preferred Stock remain outstanding.

Will PLBY convert more Series B Preferred shares in the future?

PLBY Group may elect to convert additional Series B Stock in the future based on the common stock price and/or redeem additional Series B Stock for cash.