Can Pop Mart Keep Climbing? And If Not—How Do You Short It?

Tom_Brady
06-20

Since January, Pop Mart’s stock has skyrocketed more than 200%, driven by IP mania (think Labubu and Molly) and massive FOMO. These cute figurines have become the "spiritual opioids" of China’s Gen Z. Resellers, scalpers, and livestreamers have all piled in. Even Chinese social media feeds are flooded with Labubu photos. $POP MART(09992)$

But things started cooling off on June 18, when Pop Mart restocked its red-hot Labubu 3.0 series. The secondhand price for a box of blind boxes (6 units) quickly collapsed from ¥1100–1500 to ¥600–900. Pop Mart’s stock followed suit, dropping 9% in two days, and over 11% on the week.

Can Pop Mart keep going up? And if you’re bearish—how can you short it?

Option 1: Shorting the Stock Directly

The most straightforward way to bet against Pop Mart is through short selling.

That means borrowing shares from your broker and selling them on the open market. If the stock drops, you buy them back cheaper and return them—pocketing the difference.

Let’s say you short 100 shares at HK$200, and later buy them back at HK$100. Your profit? (200 - 100) × 100 = HK$10,000. But if it goes up to HK$300? You’d be down HK$10,000.

The idea is simple. But in practice, shorting Pop Mart is painfully expensive.

  • First, there’s a 50% margin requirement. Want to short HK$10,000 worth? You need to post at least HK$5,000 in cash collateral.

  • Then comes the borrowing rate—which is 100% annualized. Even if the stock goes sideways, you’d lose money just paying interest.

  • And don’t forget the volatility risk. Pop Mart can swing 10%+ in a day. If the stock spikes, your broker might margin call or forcibly close your position, locking in losses.

To sum it up: shorting is high risk, high reward. It gives you full upside on a drop, but with massive cost and risk. Great for pros with tight risk control—not for casual traders.

Option 2: Buying Put Warrants (Puts)

If you don’t want to short the actual stock, there’s another way unique to Hong Kong markets: warrants—aka “structured products” similar to options.

For example, you can buy a put warrant on Pop Mart. These work similarly to put options in the U.S.: you profit when the stock price drops, and you get leverage with limited upfront capital (a few hundred HKD can get you started).

The advantages?

  • Low cost, no need to borrow shares

  • No margin calls or interest charges

  • Clear max loss (what you paid for the warrant)

But the drawbacks are real too:

  • Short expiry periods (often 1–6 months)

  • Time decay eats into value daily

  • High sensitivity to implied volatility

If you time it right, a 5% drop in the stock could mean a 20%–100% gain on the warrant. But if you’re too early or the stock stalls, it bleeds value fast.Warrants are best used for short-term tactical bets, not long-term convictions.

Short carefully. Trade smart.

Pop Mart Falling: New Series On the Way, Bottom or Not?
Pop Mart announced this week that it expects its revenue for the first half of 2025 to increase by no less than 200% year-over-year, and its net profit to grow by no less than 350% year-over-year. However, the stock has continued to decline since the announcement. Tomorrow, Pop Mart is set to release a new Crybaby series called "ShinyShiny." Do you believe other IPs can continue to grow? Is this sharp drop a dip-buying opportunity?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • EvanHolt
    06-20
    EvanHolt
    Incredible insights! You're on fire! 🔥 [Cool]
  • LouisLowell
    06-20
    LouisLowell
    Great insights on Pop Mart! Love it! [Great]
  • 闪电侠08
    06-20
    闪电侠08
    Okkkk
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