The euphoria surrounding Labubu toys is starting to resemble the boom-and-bust cycle that ended in the collapse of Beanie Babies in the 1990s, a warning sign for investors, a bearish analyst says.
The hype over the sharp-fanged monster dolls is about to peak, and doubts about the next sales driver for owner Pop Mart International Group suggest its shares have limited upside, said Melinda Hu, a senior research analyst for Asia consumer stocks at Bernstein in Hong Kong.
¡°The scarcity, the hunt, the dopamine hit and the secondary market¡± fueling Labubu¡¯s popularity resembles the speculative cycle of Beanie Babies, said Hu, who¡¯s the only analyst to currently have a sell rating on Pop Mart. ¡°I wouldn¡¯t advise long-term investors to add the shares without fundamental changes¡± in the company¡¯s strategy, she said.
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