Labubu maker's shares plummet after incident during promotional stream

China's Pop Mart International Group, maker of the Labooboo doll and other popular accessory toys, saw its stock price plummet on Nov. 7. The stock plummeted after an incident occurred during a Pop Mart promotional stream that questioned the justification of the prices of its products.

Pop Mart securities at the opening of trading in Hong Kong collapsed by 5.1% - to the minimum since May. This is the largest drawdown for the last two weeks, Bloomberg writes. Subsequently, the fall accelerated to 5.7%.

The sale was triggered by an incident that took place on the evening of November 6 during a stream of Pop Mart, an extremely popular sales tool in China, where presenters show products and convince viewers to buy them. Among other things, this time the sellers were showing off keychain pendants from the DIMOO series, which are sold in "blind boxes."

During the live broadcast, the camera caught a conversation between two employees that went viral on Chinese social media. One of them said, holding the key chains in his hand, "This thing sells for 79 [yuan], really expensive." The other replied, "That's okay, there will be people who will pay."

"The company is investigating the situation," a Pop Mart spokesperson told Bloomberg news agency. Asked whether the 79 yuan ($11) price tag would be adjusted, Pop Mart customer service said it had not received notifications to that effect, Chinese website DaHe Fortune Cube reported, citing local publication The Cover.

Over the past year, the Beijing-based company has become the hottest Chinese stock in the consumer sector thanks to the frenzied demand for Labooboo toys around the world, Bloomberg writes. However, Pop Mart shares are now trading 38% below the peak reached in late August - amid profit taking and concerns that the boom for its products is unlikely to continue, the agency notes.

Despite Pop Mart's problems, the vast majority of analysts are advising buying its stock. According to FactSet, 34 of the 38 analysts covering the company's securities have given them Buy or Overweight ratings.

This article was AI-translated and verified by a human editor