Bull Case Bear Case: 1911 C55 Georges Vezina Rookie Card
April 5, 2022
Dylan Dittrich, Bradley Calleja
Welcome to the latest edition of Bull Case Bear Case. As always, the goal is to give investors a clear, balanced view of both sides of the coin. Prepare to tackle the week with confidence!
1911 C55 Georges Vezina Rookie Card
4/5 @ 2:30PM ET
Historic and rare. With only nine like-graded examples in existence and only a single copy graded higher, the coveted C55 Georges Vezina card has carved out a place as one of the rarest and most iconic pieces of hockey cardboard. There is an aura around the C55 series, which is believed to have been issued by Imperial Tobacco, the cards do not carry any advertisements. The cards feature intricate hand-drawn designs that are similar to the T206 series from the same period. For collectors that target cards carrying historic significance, the C55 set delivers. The C56 set, which was actually produced one year before the C55, is considered the first major issued set of hockey cards and both the C56 and C55 pre-date the National Hockey League. Where the C55 separates itself from other pre-World War I cards is with its bold imagery and bright colors. The cards were difficult to manufacture as they were the first set to use a printing technique known as chromolithography. The process was utilized in a variety of 19th-century Allen & Ginter sets but more simplistic printing measures were common throughout the 20th century as quantity over quality became the theme. The C55 set is unique in that regard though and the while the process of drawing images on a flat stone surface, then spreading water over the stone to moisten and lift the image onto paper might seem prehistoric, it is the science that went into curating these works of art.
Hockey reaching new heights. Historically, hockey card and memorabilia values have trailed the prices of collectibles from other mainstream sports. In the first quarter of 2022, Goldin set a new record for any modern hockey card when they sold a Gold PMG Sidney Crosby for $164,400. In 2021, there were more six-figure hockey card sales than in the previous five years combined and with names like Crosby, Ovechkin, McDavid, and Howe still searching for a seven-figure sale, hockey has become one of the trendy answers to the question 'which sport is still undervalued'. Recent appreciation for hockey collectibles has extended beyond cards, as Heritage established a new record for any sports magazine when they sold a 1981 copy of Sports Illustrated for $30,000. The magazine derives its value from its cover, which features Wayne Gretzky in his first of what would be many appearances on the front page of S.I.
Everlasting legacy. Each year, the National Hockey League awards the top goaltender a trophy named after Georges Vezina. While non-hockey fans might not be as familiar with Vezina and his impact on the game, it is difficult to find a more dominating player from the earliest days of the NHL. Vezina was one of the nine original inductees into the Hockey Hall of Fame and while his career and life was tragically cut short due to a bout with tuberculosis, his influence and legacy continues to live on. Vezina played in an era where the average goals allowed per game in the NHA and NHL consistently hovered near 5. During the 1917-18 NHL season, the league average was 4.98 goals per game while Vezina only allowed 3.93. In his final three seasons from 1922-25, Vezina had a goals allowed average of just 2.08 compared to a league average of 2.74. Unlike many athletes who have since passed, Vezina maintains a level of relevancy with his name tied to the annual award given to the league's top goaltender.
Lagging performance. The average return for sports cards and memorabilia that is trading on Collectable or has been exited is 11.60%. Approximately7% of all cards and memorabilia trading on the platform would qualify as Pre-War and the average return for any pre-1940 offering is 11.14%. The average return drops significantly for assets that are pre-1930 though as the ROI is 3.47% and 5 of the 7 offerings are currently trading negatively. The hockey market on Collectable has delivered a mixed bag of results. The premier card on the platform, a 1979 O-Pee-Chee Wayne Gretzky (PSA 9) is up 95% since IPO but has dropped -30% over the last six months. There is also a basket of Sidney Crosby cards that are up 13.9% since IPO but are down -18% and the last month. Interestingly, both the Gretzky and Crosby offerings are trading below their fair market values and have not kept pace with relevant auction valuations.
Unproven vintage hockey market. Ask someone who is not a hockey fan who Sidney Crosby or Wayne Gretzky are and there is a good chance that person will still know who you are talking about. Now ask that same person who Georges Vezina is, and there is a higher probability that they will have no idea who you are talking about. To those of us within the space, Vezina is a legend who played at a level decades ahead of his time. Pre-War hockey has never attracted much respect from collectors though and if you look at a list of of top hockey card sales, Gretzky and Mario Lemieux dominate the lineup, with a few modern players filling in the cracks. This is the first vintage hockey card to be offered on Collectable and while the audience might be reception, the recent tumbles in both the Gretzky and Cosby markets raise valid questions about the appetite for hockey on the platform. Putting aside the outlier eBay sale for the Gretzky O-Pee-Chee, the Collectable card is trading $20,000-$30,000 below recent prices while the Crosby basket rejected a $200,000 buyout but is still down -18% in the last 30 days. Both Corsby and Gretzky are established players who carry more name recognition that Georges Vezina and unlike those offerings, this Vezina card does not have a sale that matches or surpasses this IPO price, leading us the our final point.
More evidence needed to support the valuation. The market cap for this IPO opens just under a 2x multiple to the highest sale price ever for a C55 Vezina. The card offered by Collectable does carry a PWCC-E designation which places it within the top 15% of the overall PSA 7 population based on eye appeal. According to PWCC, "vintage cards with a PWCC-E designation have statistically sold for over 160% of the average market price". There is no question that eye appeal plays an important factor in the valuation of any card, especially vintage, and with a population of nine, the PWCC-E designation means that this example would have the best eye appeal of any like-graded copy. The questions with the IPO market cap are less about the eye appeal premium and more about the history of vintage hockey. There has never been a public six-figure Pre-War hockey card sale and this market cap is well above the price anyone has publicly paid for any card from the C55 set. Another factor worth considering is that the last direct comparable sale, which occurred in May 2021, took place at a time where the blue-chip hockey market was near a peak. For example, PSA 9 graded O-Pee-Chee Wayne Gretzky cards were selling between $200,000-$240,000 through the month of May but have not managed to push past $170,000 since the summer.
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