Pop Mart Shares Tank as Labubu Doll Hype Wears Off, $13 Billion Lost, Investors Lose Interest

Pop Mart International Group Ltd, the Chinese toy maker that produced the erstwhile popular Labubu dolls, has witnessed its share price rally come to an abrupt end, wiping out almost $13 billion in capital in weeks. The steep fall has led to increased doubts over the long-term nature of the Labubu mania and questioned the lofty price valuation of the stock.

Previously one of the top-performing stocks in the Hang Seng Index, Pop Mart shares fell almost 9% in Hong Kong trading, the biggest decline since April. The decline came after a downgrade by JPMorgan Chase, which termed the stock "priced for perfection."

Analyst Kevin Yinny cautioned that any small misstep (whether negative media reports, resale price falls, or licensing difficulties) could lead to further underperformance of the stock in international markets.

Read More: Lucknow woman almost failed at engineering, then quit a Rs 1 Cr salary job in Dubai – now sells oat milk; clocked Rs 2.2 Cr revenue

Labubu Challenges

At the very core of this challenge is the lukewarm response to Labubu dolls in China's secondary market, despite a new batch launch in August.

These rabbit-eared plush toys had been a cultural craze, supported by international celebrities such as BlackPink's Lisa and soccer star David Beckham. Prices in the secondary market are also now falling: a market indication that investor appetite is weakening.

Nevertheless, Pop Mart shares have increased by over 180% in 2025 due to the massive craze surrounding Labubu that swept across Asian markets due to TikTok and celebrity sightings with the doll.

Read More: Bihar Friends Clock Rs 1.5 Cr Monthly By Selling Flavoured & Raw Makhanas In Bulk To 41+ Indian & International Food Brands

Stock Mapping Of Pop Mart

The stock had over quadrupled in 2024, which saw it include both the Hang Seng Index and the Hang Seng China Enterprises Index. Pop Mart currently trades at about 23 times its 12-month forward earnings, an indication of high investor expectations.

Down the line, Pop Mart will release a fresh version of Labubu coupled with animation and interactive toys before Christmas.

However, JPMorgan views such efforts as "low visibility" drivers and downgraded the stock to neutral from overweight, reducing its price target by 25% to HK$300.

Read More: Meet Raipur Brothers Who Launched A Pure Masala Brand With Zip-lock Packs & Shook Up Players Like Everest & Catch - Clocked Rs 92 Cr Revenue

Shifting Investor Preference

Investor sentiment is also shifting. The proportion of buy ratings on Pop Mart has dropped to its lowest level in a year, down 91%, highlighting growing uncertainty about the company’s next moves.

Although Pop Mart is still a market darling with a healthy brand, the decline in Labubu hype and high valuation presents near-term headwinds. Shareholders are now carefully observing if new product offerings and strategic programs can revive demand and continue the company's strategic growth.

Read More: Delhi Startup Founded By 2 Childhood Friends Lets You Exercise On Water – Becomes First-Ever Floating Fitness Brand In India