Just weeks ago, Pop Mart founder Wang Ning was riding high with a net worth of $27 billion, richer than Silicon Valley’s Peter Thiel, thanks to a rabbit-eared plush called Labubu. The “ugly-cute” doll has been flaunted by celebrities from David Beckham to Blackpink’s Lisa, pushing resale prices to dizzying heights.

But once the “cool hunters” move on, Wall Street does too, and Wang is finding that out the expensive way.

Since Pop Mart’s peak on Aug. 26, the stock has plunged about 20%, erasing $13 billion in market cap—a quarter of his company’s worth—as the craze shows its age. The Beijing-based toymaker’s Hong Kong stock continued to dive on Monday, sliding as much as 9% in its steepest single-day tumble since the U.S. unveiled “Liberation Day” tariffs in April.

Wang has personally lost $6 billion of his own net worth since late August, according to a Forbes estimate.

The sharp pullback follows a downgrade on Monday from JPMorgan, with analysts warning that the firm’s valuation leaves “little margin for error” after a 427% surge over the past year.

Pop Mart did not immediately respond to Fortune’s request for comment.

From craze to comedown

For much of 2024 and early 2025, Pop Mart was the darling of the Hang Seng Index as Labubu dolls sparked a frenzy across Asia. But a toy with a hype built on its engineered scarcity—Labubu dolls are notoriously difficult to collect and have a thriving resale and forgery market—cannot be valuable forever.

“The whole thing feels like the inevitable life cycle of something that becomes faddish, hits saturation, and then begins to fizzle,” Brook Duffy, a social media researcher and a communications professor at Cornell University, told Fortune. “Once too much attention gets lavished on a trend, it immediately loses its social currency.”

She compared Labubu’s rise and stall to the Tickle Me Elmo craze of the 1990s: first impossible to find, then suddenly everywhere, and finally no longer cool.

Pop Mart’s breakneck growth hasn’t reversed yet. Sales have surged over the past two years, with revenue more than doubling in 2024 and climbing another 200% in the first half of 2025.

But there are early signs of fatigue. Resale prices for Labubu collectibles are slipping, and analysts worry that the company remains heavily reliant on a single product.

“As soon as you saw celebrities showing them off, that was the tipping point for Gen Z,” Duffy explained. “What was scarce suddenly felt commercial.”

JPMorgan analysts echoed that skepticism in their downgrade, trimming their target price to HK$300 from HK$400. While Popmart’s first-half earnings and collaborations with brands like Uniqlo hit their marks, upcoming projects, including a Labubu animation series and interactive toy lines, have a speculative value so far, JPMorgan said.

Pop Mart, in other words, is a victim of its own success. After a five-fold stock rally over the past year, even minor disappointments—from weaker resale values or whispers about product quality—can trigger an outsized selloff. So what once looked like a runaway growth story now appears more to be a precarious bet.

A test of staying power

The deep question is whether Labubu can have a “soft landing” from its craze and evolve from fad to franchise.

“The novelty is always going to wear off,” Duffy said. “You just don’t know when. That unpredictability is what keeps marketers up at night.”

Pop Mart is betting big on expansion, seeking to operate 200 foreign stores and vending machine “roboshops” by year’s end, and aims for overseas markets to contribute 60% of earnings by 2027. Labubu alone still accounts for more than a third of sales.

But sustaining cultural relevance is harder than scaling retail.

“Right now feels like a critical inflection point,” Duffy said. “In a social media era, the hype cycle moves at breakneck speed. Something that was everywhere yesterday can feel overexposed today.”

For Wang, the clock is ticking: find a way to keep Labubu fresh, or risk watching his billion-dollar mascot fade into the toy box of past fads.