The Labubu trend is massive and investable!

**Dave** (0:03)
There is a weird toy triggering a global frenzy right now. They are called Labubu, and stores can't keep them in stock. Collectors and wannabe influencers are flooding malls and waiting in lines for every new drop. They buy these things and unbox them on TikTok, which is thrilling content, I'm sure. Labubu's, they're sold in blind boxes, meaning you don't know which one you're going to get until after you buy it and blindly open the box, which is actually a huge part of their success. The element of surprise and scarcity and some of the characters being harder to find than others. It's really become an addiction for their fans. The company behind Labubu is called Pop Mart. They're a Chinese retailer listed on the Hong Kong Exchange. They've been around in China for 15 years. They started doing blind boxes about 10 years ago. They just expanded into the US last year, and they currently have a couple dozen stores and pop-up locations here. Because of the worldwide Labubu viral moment we're going through right now, the growing popularity of blind boxes as well, the revenue for this company has just doubled in the past year, and the majority of that is from selling Labubus. That has caused the stock price to jump more than 1200% since the beginning of last year. So are we at the peak of a viral moment, or will the stock keep going up? I guess you could say the Pop Mart stock is pretty much like a blind box itself today on Dumb Money. We're going to uncover our investment and tell you why at least one of us is still betting that the Labubu trend is going to push Pop Mart even higher. This is Dumb Money Live.
Hey there, Dave here, along with Chris and Jordan. We are Dumb Money. Welcome to Dumb Money Live. Take a quick second, if you will. Smash the like button for the almighty algorithm, Chris Jordan. We can see Chris is remotely doing this from vacation. So we appreciate that. Millennials had their beanie babies. Jin Z is apparently jumping on the Labubu bandwagon, making it the must-have random doll for their generation. I don't get it. I mean, I kind of get it, but I really don't get it. So we have a lot to talk about today. Chris, you were teasing this last time we were on, talking about getting money from your global account into the Hong Kong market. So let's start from the beginning. What is your thesis?

**Chris** (2:18)
Hi, Dave. I get it. Let's just start there. I get it. All right.
Let's just say that...

**Dave** (2:26)
I get some of it. We'll get into the things that I understand about this and the things that I think are just completely absurd.

**Chris** (2:33)
Maybe part of the reason why I get this, as you guys know, I'm a part owner of Collecticon. We're the world's largest Pokemon show. We were in 18 cities this year in the US. And quite honestly, over the past 30 years, it's been one of the most successful investments companies that I've been affiliated with. It's just a complete runaway success. And over the last few years, I've really gained a deep understanding of what drives the TCG trading card game sector and Pokemon in particular. And while there is an element to that industry sector, and by the way, Pokemon is one of the world's largest toy companies, okay? Very similar size to Pop Mart. They do about, I think, about half a billion dollars of profit a year. A big piece of that success has to do...

**Dave** (3:29)
First of all, can we just talk about the size of the company? Because Pop Mart is doing 500 million in revenue. But with the latest...

**Chris** (3:38)
No, no, no, no, no, no, Dave. Wrong, wrong, wrong. Pop Mart is doing over about a billion and a half in revenue. They're doing half a billion in profit. I know what's profit.

**Dave** (3:47)
Okay, half a billion in profit. They're doing 913 million in revenue. And if you compare that to other toy companies, Mattel and Hasbro, they are doing around 5 billion, compared to 900 million. I just want to put out there the picture of the financial health of these companies.
Pop Mart, adjuster for US dollars, is a 44 billion dollar company.

**Chris** (4:12)
Okay, again, Dave.

**Dave** (4:13)
Hasbro and Mattel are a fraction of that.

**Chris** (4:16)
Dave, again, don't look at revenue, look at margins and profit. But okay, let's talk with Stu for a second here. Okay? The success of Pokemon. And by the way, I think, can we frame it a little larger for the audience? Because this is really important, guys. This is really important. If you look at the five biggest toy trends of modern history, okay, it starts in the 70s, okay, with action figures. Remember GI. Joe, Yeah. Transformers. That was a big part of Star Wars, a big part of our youth. Even, I would say, maybe bigger than that, was the video game console boom that started in the 1980s, okay? That was one of the biggest toy trends of modern history. Shortly after 1990 is when Pokemon hit, and collectible card trading games became a mega boom. And to this date, it is now one of the largest toy trends in history, and one of the most profitable because of the cost of actually producing those cards relative to the price that you're able to get for those cards. That's something really key when you compare it to just a normal toy company that has to spend a ton of money making stuff, sell it through a distributor, ship them big toys, little toys, margins are really, really thin, they have licensing fees because they're licensing all these brands. Not the case with TCG.