Image source: Unsplash

I’m old enough to remember when Apple (AAPL) was a punchline. By 1997, the company was on the brink of bankruptcy, weeks away from running out of cash. Then Steve Jobs came back and built it back into the tech giant it is today.

I remember in the late 2000s, after the housing collapse, when people swore off real estate. Yet real estate prices around the country are soaring today.

And don’t get me started on fashion. I’ve been around long enough to see trends go from cool, to uncool and back again. Even Crocs somehow went from a fashion disaster to a billion-dollar brand.
 

Image: Crocs

It seems that every few years, something everyone has written off comes roaring back to popularity. That’s what’s happening today with NFTs, the digital collections that people mocked after their 2022 crash.

NFTs are showing signs of making a comeback. And at the center of this resurgence is a collection with a comical name. It’s called Pudgy Penguins. But these penguins are no laughing matter. In fact, they already have ambitions to IPO.

The Return of NFTs

Non-fungible tokens, or NFTs, are unique digital assets that represent ownership of something. In simple terms, they’re like digital collector’s items. They might represent art, music, videos, or even virtual real estate. And just a few years ago they were quite popular.

In 2020, NFT sales volumes ballooned from a modest $94 million to nearly $25 billion by late 2021. You might remember headlines touting crazy NFT sales, like a piece of digital art called “Everydays: the First 5000 Days” that sold for a whopping $69.3 million at Christie’s in 2021.
 

Image: By Mike Winkelmann (Beeple) – nytimes.com

At their peak, NFT marketplaces were absolute madness, with over 28 million wallets trading NFTs in 2021. OpenSea, the biggest one, saw monthly transaction volume soar to $3.4 billion by August 2021, including a single day spike of $2.7 billion in May 2022.

Then volume cratered, and collections that sold for hundreds of thousands were suddenly worth less than a used Honda Civic. And for most of the past two years, NFTs have looked like a casualty of being over-hyped. But recently, something has changed.

In July, NFT sales hit $574 million. That was the second-highest month of the year and up nearly 50% from June. The digital collection CryptoPunks jumped nearly 500% in sales.
 

Source: B2BROKER

And Pudgy Penguins — a “cute animal” collection — saw sales surge over 370%.

It could be easy to write this off as a blip. After all, NFT trading volumes have been known to spike. But this surge was followed by a strong August of NFT sales of nearly $600 million. That’s at least 55% higher than the previous August, and up another 4.3% over July’s strong sales.

Which means this recent rally could represent a genuine change in momentum. Especially for Pudgy Penguins. Because unlike most NFT collections that stayed on the blockchain, Pudgy has crossed into the physical world.

Its website barely mentions NFTs at all, claiming: “Pudgy Penguins is a global IP focused on proliferating the penguin, memetic culture, and good vibes.” And thanks to CEO Luca Netz, this isn’t just talk.

In fact, you can walk into stores right now and buy a Pudgy Penguin plush toy. Over 2 million of them have already been sold. I bought a couple Pudgy Penguin dolls over the weekend on clearance at Macy’s when I was picking up something for my 5-year-old.
 

But plush is just the start. You see, Pudgy Penguins has become an actual merchandise business. The brand has a children’s book coming out this fall through Random House, and its clothing line debuted over the summer. It even has a licensing platform that lets NFT holders turn their penguins into products.

This is the kind of expansion most NFT projects only dreamed about back in 2021. And it’s big business. Pudgy Penguins is on track for $50 million in revenue this year.

But Netz has even bigger ambitions for the company. He wants Pudgy Penguins to IPO by 2027. Which means a project that started as cartoon penguins on Ethereum could soon be ringing the opening bell on Wall Street. There was even an ETF filing centered on Pudgy Penguins. It’s a mix of tokens, NFTs and crypto that the Financial Times called: “the most grimly inevitable ETF of 2025.”

But I’m wary of using Pudgy Penguins as a punchline. After all, plenty of jokes were made at the expense of Apple in the 90s. And when you take a step back, you can see how what Pudgy Penguins is doing represents the next logical step for NFT ventures.

The NFT boom of 2021 was all about speculation. People thought the JPEGs themselves held value. But that led to wild price fluctuations. This current revival has a more solid foundation. It’s about taking digital IP, expanding it into real products, and building companies that actually make money. This is one reason why the global NFT market is expected to explode over the next five years.
 

Source: https://coinlaw.io/nft-market-growth-statistics/

So consider Pudgy Penguins a test case for turning NFTs into “sticky” brands. If they can pull it off, then dozens of other NFT brands will likely follow. And we might look back on this potential Pudgy Penguins IPO as a major catalyst for NFT market growth.

Here's My Take

Pudgy Penguins might seem like a joke. But so did Bitcoin, Crocs and even Apple at one point.

If this IPO happens, it could change how Wall Street thinks about NFTs going forward. Instead of speculative tokens, NFT brands could become intellectual property platforms that scale into billion-dollar businesses. And Pudgy Penguins could be the first brand that proves NFTs are no laughing matter.

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