Few companies capture the strange physics of a viral hit quite like Pop Mart. The Chinese toymaker rode the Labubu craze to dizzying heights — and its shares have since become a magnet for skeptics convinced the boom cannot last.
From sensation to selloff
Founded in 2010 by the entrepreneur Wang Ning, Pop Mart built its business on the "blind box": sealed packages whose buyers do not know which figure they will get until they open them. The model, and the runaway popularity of Labubu — a snaggle-toothed, elf-like creature designed by the artist Kasing Lung — fueled an extraordinary run. The company reported a surge in sales and profits in 2025, and its Hong Kong-listed shares became one of the market's standout performers.
Then the mood turned. The stock has fallen sharply — roughly half — from its peak in August 2025, including a steep single-day drop in March, as investors began to question how long the Labubu fever could burn, CNBC reported.
The short sellers
Through it all, short sellers — traders who profit when a stock falls — have kept circling. Short interest in Pop Mart has risen to its highest level in about two years, Bloomberg reported. For much of the rally, betting against the company was a painful and costly trade, as the shares simply kept climbing; the recent pullback has been kinder to the doubters. The result is a stock caught between momentum and skepticism, where the question of who is "right" seems to flip with every swing.
The case against
The bears' argument is straightforward: crazes fade. They point to Pop Mart's heavy reliance on a single hit — the Labubu-led "Monsters" line now accounts for a large slice of revenue — and to softer sales of other characters, as evidence that the company is exposed to fashion risk. Several investment banks have trimmed their price targets in recent months, citing stretched valuations and doubts about whether the growth can be sustained.
The case for
The bulls counter that Pop Mart is building something more durable than one doll: a global "intellectual property" platform, with a growing roster of characters, an expanding store network abroad and strong profitability. They note the broader boom in collectibles aimed at adults, and at least some analysts retain bullish ratings, betting the company can convert a viral moment into a lasting brand.
The bigger question
Pop Mart has become a kind of test case for a recurring market argument — whether a business powered by consumer passion can grow into its valuation, or whether the enthusiasm inevitably cools. For now, the only certainty is volatility: a stock that has humbled the confident on both sides. None of this is investment advice.
