Adult entertainment platform OnlyFans seems to be beating out the rest of the technology sector. The number of creators and subscribers alike has grown in recent months, according to company CEO Amrapali “Ami” Gan.
“We’re not seeing any slowdown,” Gan told Axios.
do not miss
OnlyFans launched in 2016, but its popularity has exploded during the pandemic, when celebrities and bored regular people alike stuck in quarantine started creating their own accounts and pushing content.
But the rise of “sexual influencers,” or content creators who focus on sex and relationships, offers an interesting lesson in market dynamics.
Fictional mobster Tony Soprano once said there were only two companies that were against a recession: adult entertainment and “our thing.” Turns out he was right. According to researchers at the LSE Center for Economic Performance, recessions push more people into criminal activities. They also boost demand for all forms of adult entertainment, including pornography, alcohol, gambling, and tobacco.
The phenomenon is so well understood that investors and researchers have a term for it: “false stocks.” Sen stocks such as Anheuser-Busch (NYSE: BUD) and British American Tobacco (NYSE: BTI) have outperformed the S&P 500 in 2022 by wide margins.
Meanwhile, OnlyFans seems to have avoided much of the pain that is spreading across the tech sector. The company has announced only one small round of layoffs in 2022, while media giants like Twitter and Netflix have lost up to 50% of their workforce.
In fact, OnlyFans is profitable. Since 2020, the platform has provided at least $500 million in net profits to its owner, Leonid Radvinsky. Gunn says the number of content creators has expanded to 3 million this year. These “sexual influencers” combine sexual content with traditional online influencer models to generate up to $900,000 per month.
Unfortunately, retail investors are missing out on this amusing growth story as OnlyFans remains a private company. That is unlikely to change as Jan says the team is “happy to be privately owned”. However, there are other ways that investors can bet on the adult entertainment sector in 2023.
RCI Hospitality (NASDAQ:RICK) operates more than 40 strip clubs across the country. CEO Eric Langan said the company is “recession-proof” and that “business is very, very good and we continue to generate record revenue quarter after quarter.”
Nearly half (45%) of the company’s revenue is derived from sales of alcoholic beverages, which tend to be marked up in strip clubs. Simply put, the company has pricing power in the midst of a recession and record high inflation.
In the fourth quarter of 2022, the company reported a 29.9% growth in revenue and a 71.6% growth in net free cash flow. The stock is up 95.8% since July.
Gaming and Leisure Properties Inc. (NASDAQ: GLPI) is a professional real estate investment corporation that owns 57 casinos across 17 states. These casino properties are occupied by well-known brands such as Penn Entertainment, Caesars Entertainment, Boyd Gaming Corporation, Casino Queen, Bally’s, and Cordish Companies.
All contracts are ‘triple net’ leases which puts the company in a favorable position. GLPI stock is up 8.5% over the past year, trades at 21 times earnings per share, and offers a 5.6% dividend yield.
If you’d rather not pick individual stocks to sin, there is a fund that makes it easy to bet on this phenomenon. AdvisorShares Vice ETF (NYSEARCA:VICE) has more than $8.5 million in assets under management and holds wrongfull stocks like Heineken, Monarch Casinos and MGP Ingredients.
The stock is up 6.5% over the past six months.
What do you read next
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.