What Comes Next for Playboy Enterprises?

Nearly two weeks after Christie Hefner announced plans to step down as CEO of Playboy Enterprises, insiders at the company are still puzzled by exactly what it means. But they do have some theories.

One rumor making the rounds is that Hefner's surprise departure heralds a major change of direction for the company -- one that will possibly include taking it private. Though it's hardly the ideal time to be seeking financing, Playboy's anemic stock price ($2.20 a share, down from above $9 a year ago) means the amount of cash needed would be manageable, especially as the Hefners already own 35 percent of the common stock. The company's current enterprise value is $158.1 million.

Media bankers say taking Playboy private is a plausible course of action. "You have to wonder why they're public to begin with," says Reed Phillips, managing partner at DeSilva & Phillips. "If they think the stock is really depressed, that may be the way to go."

"It makes sense," agrees Mark Edmiston, managing director of AdMedia Partners, adding that Christie Hefner's exit would be logical outgrowth of that. "If you needed to have new investors, they would want a new management team."

A Playboy spokeswoman said the company's policy is not to comment on rumors or speculation (although it did just that last time this rumor surfaced, in February 2007, knocking it down). But whether a shift to private ownership is in the works or not, it's clear that Hefner's exit is about more than just her public service ambitions. That much was evident from an interview in the January issue of the magazine with Hugh Hefner's sons, Marston and Cooper. Though still teenagers, the two have long been recognized inside the company as the eventual successors to their father, with Christie, his daughter by a previous marriage, serving in the role of regent. Marston, the elder son, was quoted as saying he'd like to see the magazine take "a different direction," while Cooper said the nude pictorials must go back to being "kind of artsy, classy."