To bet against Pop Mart this year has been to lose money — and to keep doing it anyway.
The toy that ate the market
A lumpy, fang-toothed plush doll sold in a sealed box you can't see into: that is Labubu, and the blind-box craze around it has made Pop Mart International one of the most talked-about stocks in Asia. The company booked about 37.1 billion yuan (roughly $5.4 billion) in 2025 revenue, up around 185 percent from a year earlier, Guangming Online reported from its results, with the Labubu line alone generating close to two-fifths of sales. More than 100 million Labubu units were sold over the year.
What the shorts are doing
Short selling is a bet that a price will fall: an investor borrows shares, sells them, and hopes to buy them back cheaper, pocketing the difference. The danger is asymmetry — a stock can only fall to zero, but can rise without limit, so losses on a short have no ceiling. That is the trap Pop Mart's bears have walked into. Short interest has stayed elevated — recently around 12 to 13 percent of shares outstanding and near its highest as a share of freely traded stock since 2022 — even as the stock has climbed, according to S&P Global Market Intelligence data reported by CNBC. By that firm's reckoning, Pop Mart is the only stock among Hong Kong's ten most-shorted names where the bears are currently losing money on paper.
The bear case
The skeptics are not irrational. Pop Mart's shares tumbled more than 40 percent from their 2025 peak, and resale prices for Labubu collectibles — a gauge of how hot demand runs — fell sharply from their highs before steadying, the South China Morning Post reported. Bears point to the company's heavy reliance on a single character, a rich valuation that prices in years of fast growth, decelerating quarterly sales, and the risk that Chinese regulators tighten rules on the blind-box model.
The bull case, and the standoff
Bulls counter that Pop Mart is no longer just a China story: overseas revenue has surged to more than 40 percent of sales, led by explosive U.S. growth, and the company is opening flagship stores in major Western cities and diversifying production beyond China. Several of its other characters each generate sizable revenue, suggesting it is not a one-doll act. The persistence of the shorts, then, is its own signal — a meaningful slice of professional investors is convinced the Labubu boom is a sugar rush that will fade, and that the price is wrong. They may yet be proved right. But for now, every week the trade stays open, it costs them — and the risk of a squeeze grows.
