Bull Case Bear Case: Ronaldo Sticker, Beatles Autographs, Hirst's The Currency, and More (Pro Edition)

Welcome to the latest edition of Bull Case Bear Case, with a full slate of offering analysis for our Pro subscribers. 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!

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Collectable

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2002 Panini Stickers Cristiano Ronaldo RC (PSA 10)

3/1 @ 2:30PM ET

Valuation: $109,500

Bull Case

• Most popular athlete on the planet. Cristiano Ronaldo is the only person alive with over 400 million Instagram followers. 400. MILLION. That is a truly preposterous number, and it’s estimated that he could charge $1.6 million for a single sponsored Instagram post. The reality is that you could not find an athlete for which there is a larger potential TAM on a global scale. That makes the theoretical supply and demand imbalance incredibly attractive, particularly as the Hobby grows more international in nature. Many point to the 2022 World Cup as a potential catalyst for that globalization and for the rise of soccer collectibles in particular - however, Ronaldo and Portugal still have to make it through a four team playoff which includes Italy to secure their tournament berth.

• Earlier than recognized rookie card. Ronaldo’s most valuable and recognized rookie card is the 2003 Panini Sports Mega Craques card, with the record price of $312,000 established back in October. You’ll notice that card is actually from one year later than the sticker here, which raises questions about the “true rookie” status in soccer. It’s often the case that there are earlier stickers or cards from less celebrated manufacturers or sets that are overlooked by the market in favor of a more traditional, albeit later choice. The population of the 2002 Sticker is actually lower than the 2003 Mega Craques card as well, with just 22 PSA 10s and 48 BGS 9.5s, versus 38 PSA 10s and 41 BGS 9.5s for the latter. Yet, the most a PSA 10 has sold for is $138,000 back in December. A bull would believe that there is a gap that needs closing here.

• Fractional community in search of post Pele grails. Following the record $1.3mm buyout sale of the Alifabolaget Pele Rookie on Rally, fractional investors have been in search of other places to allocate their funds for exposure to soccer GOATs. Through 2/24, the average 2022 YTD ROI (or since inception in the case of those that began trading this year) of soccer cards, excluding the bought out Pele card, is 8.5%. Two of the Mega Craques cards have been offered fractionally, one on Otis in early 2021 and the other on Rally in October. They are up 250% and 21% respectively.

Bear Case

• Authenticity concerns. Recall in our discussion of populations that the BGS 9.5 population of the sticker is actually higher than that of the Mega Craques card. Well, as it turns out, that population has increased dramatically in recent months. It grew from 32 in July of 2021 to 35 in August, 45 in September, and 50 in October. Such a rapid rise for a sticker that had been in existence for nearly 20 years understandably raised concerns. And those concerns turned out to be warranted, as many in the community have pointed out that BGS-graded examples appearing on eBay and elsewhere at auction appear inauthentic. It has been suggested that many of these examples were sent to PSA and denied before ultimately being graded at BGS, so the concerns appear less applicable to this PSA graded example; notably the PSA 10 population has not grown at all in the last year. Nonetheless, authenticity concerns may continue to weigh on the market for this sticker.

• Ever the laggard. Perhaps as a result of the above, the sticker has not had a bright start to 2022. After that record December sale, the next sale came at Goldin earlier this month, when one sold for just $80,400, 42% lower in just a couple of months. While just one sale, that does of course put the valuation here 36% above the most recent comp. It’s also worth noting that the record $138,000 sale was 28% above the next highest sale ($108,000), making this the second highest valuation ever recorded for the sticker.

• Few short term catalysts. While the long term secular tailwinds appear strong as discussed in the bull case, the short term catalysts are more limited. Rather than challenging for titles, to which Ronaldo is accustomed, his biggest focus at the club level with Manchester United will likely be Champions League qualification (though the club is still alive in this season’s Champions League). On the international stage, Portugal is at risk of missing the World Cup altogether, with a semifinal set against Turkey before potentially opposing Italy in the playoff final. Not that Ronaldo needs even more global exposure, but not appearing on the pitch at an event expected to have significant sports card implications would be an unfortunate miss.

Note: the consignor will retain approximately 46% equity in this offering. 

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2006-07 Exquisite Duncan, Yao, Dirk Triple Logoman

3/2 @ 2:30 PM ET

Valuation: $163,500

Bull Case

• International appeal. The most intriguing attribute of this card is not the fact that it features three of the greatest big men to step onto the court, but instead the reach and impact those three NBA legends had around the world. Tim Duncan was born in St. Croix and helped expand professional basketball throughout the U.S Virgin Islands while Dirk Nowitzki hails from Germany and played a valuable role in building attention around the NBA in Europe. No player had a greater impact on the NBA’s international appeal though then Yao Ming. There are actually studies conducted on the ‘Yao Ming Effect’ which examine how athletes from can influence entire economies in their home country just through their fame and following in sports. As of 2019, China accounted for 10% of the leagues global revenue and is their largest international market by far. In 2021, CNBC estimated that the NBA’s business operations in China is worth more than $5 billion and a study conducted last year found that the NBA is the most watched sports league in their country, outpacing internal leagues like the CBA and CSL.

• One of One. The primary bullish argument collectors of sports memorabilia make when comparing their collection to sports cards is the unique quality of their assets. The one of one attribute delivers a level of limited supply with a presumed increase in demand that helps drive bidding wars at auction. This Triple Logoman is a one of one and while there are other cards on the market that showcase all three of these stars, this is without question the most valuable offering. 

• Where is the ceiling? There have been three seven figure sales Logoman sales at Goldin in the last two years alone and 24 six figure results. Some of the most expensive sports card sales have involved logoman cards including a Playoff National Treasures Steph Curry which sold for $5.9 million and is currently held in the Alt Fund II, and a Luka Doncic Logoman Auto that was sold via private sale for $4.6 million. While the Logoman on Collectable is nowhere near a seven figure card, prices for the unique parallels are consistently ranked among the top ten, giving further validation that they are viewed as attractive collectibles for the high-end investor class. In essence, this is a case of a rising tide lifting all boats, but more specifically, rising Logoman prices lifting all Logomans.

Bear Case

• Narrow market. While numerous sales for Logoman cards have made headline and turned heads over the last two years, on an overwhelming basis the top sales share one commonality: they are a Logoman of a single player. To new collectors this concept can be somewhat of a head scratcher and understandably so, why would a first year Logoman of only LeBron James price at a valuation higher than a Logoman of LeBron and say Chris Bosh or Carmelo Anthony? The answer is a bit complex but it comes down to the fact that there is only one single LeBron first year Logoman while there are multiple double or triple LeBron first year Logoman cards that feature LeBron plus additional players. This is the primary reason why a top ten list of Logoman card sales is filled with single patches but void of cards that feature multiple players. The high-end multi-patch Logoman card market is underdeveloped.‍

• Big man bias. Yes, it’s real. From Shaquille O'Neal to Nikola Jokic, card prices for the top big men in the NBA have consistently trailed prices of guards. While Shaq cards are also impacted by on the onset of the junk wax era, prices never developed for other oversized stars such as Tim Duncan, Dirk Nowitski, and Yao Ming. Topps Chrome Refractor Yao Ming cards have struggled to break five figures while Dirk Refractors have peaked near $30,000. Tim Duncan cards have experienced some positive appreciation over the years but even those prices fall well below players of similar stature. Tim Duncan is arguably the greatest power forward to ever play the game of basketball and while his 1997-98 Metal Universe Precious Metal Gems Card sold for $218,000 in April, establishing a new ceiling for Duncan rookie cards, the prices are still nowhere near others that are considered the best at their respective positions. Names like LeBron, Curry, Jordan, sell for significant premiums compared to names like Malone, Chamberlain, and Kareem. There are no signs of big man bias disappearing anytime soon so a lack of love for power forwards and centers will continue to hamper prices.

• Laggard Logoman performance and retained equity. There are currently three Logoman cards trading on Collectable and the results have not been great. Through 2/25, all three are down more than 30% and two are trading at prices more than 40% or more below their IPO market caps. The average return for Logoman cards on Collectable is -39.5% and the median ROI is -40%. There have been 23 buyouts on Collectable to date but there have been no buyouts for Logoman cards. This offering also carries 46% retained equity which is not necessarily a negative but it does give investors less influence over buyout decisions on a share-weighted basis.

Note: the consignor will retain approximately 46% equity in this offering. 

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1933-2019 MLB All Star Game Ticket Set

3/3 @ 2:30PM ET

Valuation: $47,500

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Bull Case

• Complete, highly ranked set. The All Star Game Ticket set is one of the most pursued ticket sets on the PSA Registry, with the 22 sets registered trailing only the 33 sets of the World Series Basic set. Of those 22 sets, only three have ever been 100% complete, with this being one of them. In fact, in reality, it’s one of two, as another set is really one in the same with this one, just under a different label. Its rating ranks 6th among all-time sets and fourth among currently active sets (Note: all-time sets include those that were assembled at one point but have since been broken up and retired), and it is the only current set standing at 100% completion. 

• Track record of collectability. While the heavy pursuit of most tickets is a relatively nascent trend, tickets from key baseball moments is one area of the market that has been dearly-coveted for many years. Since the mid 2010s, long before this even became remotely possible for most tickets, key All Star Game tickets have sold for tens of thousands of dollars. For example, a full ticket to the 1933 debut game, graded PSA Authentic, sold for $28,860 at Heritage in 2016. One year later, a set of All Star Tickets spanning from 1933-2016 sold for $144,000. That set was the #1 all time set and crucially included the same full ticket that sold in 2016. The point is not to offer that as a comp - it isn’t (for reasons covered later), but to note that high-end demand for these types of tickets has existed for many years. There have been numerous examples of 1933 full tickets selling for $25-35k in the mid 2010s. One might also point to the $42k sale of a 1908-2018 World Series Set at Heritage in February of 2020. That retired set is #3 all time - but only when the 1907 ticket is included, which was withheld from the auction. While it would remain higher rated and likely more desirable based on subject matter, the point stands: there has been a well documented appetite in the low-to-mid five figures for key baseball sets. That provides some comfort that populations have been well-developed already in response to the values garnered, minimizing supply risk, as well as perhaps reduced risk of volatility relative to other portions of the ticket market.

• Rising tide for tickets. Those following the Hobby are well acquainted with the meteoric rise of ticket values in 2021, with eight of the top ten most expensive sales of all time taking place over the course of the year. That rise has continued in 2022, with five of the top ten sales taking place in just the first two months. While vintage baseball wasn’t the category that benefited most broadly from that trend, the headline sales are there. For example, a Jackie Robinson Debut Stub (graded PSA Authentic) sold for 2.5x mid 2010s levels. Of course, a PSA 2 ticket to that game is now the most expensive ever sold at $480,000. Two Mickey Mantle Debut stubs, both graded PSA 3, hurdled $100k in 2021. Prior to 2021, the high sale was just over $3k at Leland’s for an Authentic stub, lasting until one sold for $17k at Heritage in June. And then, in early February at Goldin, a PSA 1.5 copy sold for $115k. To the extent that tide continues to rise or if vintage baseball momentum should be further reignited relative to the rest of the market, especially after the Robinson sale, a set like this could stand to benefit.

Bear Case

• Declining Popularity of the Mid-Summer Classic. The MLB All Star Game used to be a fixture of the summer with broad, nationwide appeal - a moment of celebration of our national pastime and the icons who make it go. All Star Games - generally speaking beyond just baseball - have waned in popularity, as players (perhaps wisely) reduce effort expended and competitive spirit in the midst of very long seasons. The numbers, unfortunately, back this up. From a peak of 36.3mm viewers way back in 1976, viewership has consistently declined over decades to 8.24mm viewers in 2021, according to Baseball Almanac. That’s the second lowest viewership ever, ahead of only 2019. While the set is no doubt impressive, it’s unclear whether a rising collecting generation that  grew up in an era of less popular, less important All Star Games will pursue such an asset with vigor, and that may reduce its ability to appreciate alongside the rapidly appreciating ticket market.

• Unsold in 2020. This particular set, at the time dating through 2017, came to auction at Heritage in May of 2020. It was ranked #3 in the set registry. With a reserve price of $19,000, it did not sell. While the ticket market has certainly developed since then, many of the tickets that have soared in recent years were starting from a markedly low basis or without a track record. As noted prior, demand for All Star Game tickets (and vintage baseball) has existed prior to the market run-up, so that there wasn’t an appetite at $19,000 in 2020 raises concerns, as would the 2.5x jump in value to $47,500. It’s very much unclear that this type of ticket asset would have experienced the same appreciation as the high-flyers of 2021. 

• Other sets challenged. The most recent sale of a set came in November of 2021 at Hunt Auctions. Now, this is not a comp - the set featured tickets and stubs from 1933-2019 (with the odd exception of 2013), many of which were not graded & encapsulated. Still, the result of $9,000 came in short of the $10,000 - $15,000 estimate, indicating that interest in this type of asset has not necessarily charged up in recent years. At Goldin in 2018, a full set inferior in grade in key areas (it does not appear in the Set Registry) sold for $7,800. Finally, in 2016, a set three slots below this one sold at Robert Edward Auctions for $12,000 with just one bid at the minimum. That there was a decline from 2016 to 2018, assuming the Goldin set was in fact stronger or at least comparable in rating, introduces questions about the intensity of interest. Also, that the Goldin set has seemingly not been logged in the set registry may mean there is another current 100% completed set out there, which of course would imperil the status of this one as the lone existing set. The $144,000 sale from Heritage in 2017 is largely inapplicable, as that set was the highest rated of all time, with a rating more than 3x higher than this one. It additionally included the full ticket from the 1933 game, which consistently sold for $25-35k in the mid 2010s. This set features a stub (graded a 3), which has mostly sold in the low four figures, though there hasn’t been a sale in recent months. If you wanted to look to a recent, cross-sport comparison, a full set of PSA graded tickets to the Super Bowl (I through LV) sold at Goldin this weekend for $13,200. The Super Bowl has also experienced declining ratings, but still draws well in excess of 30 million viewers annually. Granted, that set spans a far shorter period of time, but a bearish investor may see it as perhaps demonstrative of interest in ticket sets at the present moment.

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Rally

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1989 Bowman Tiffany Ken Griffey Jr Rookie (PSA 10)

3/1 @ 12:00 PM ET

Valuation: $15,500

Bull Case

• Clean credentials. How much does the likability of a player impact the valuation of their sports card? Playfully known as “Junior” or “the Kid”, Griffey Jr. dazzled throughout his career with an unprecedented combination of home run hitting matched with flawless fielding. Now that we know just how prevalent steroid use was during the late 1990s, the home plate prowess of Griffey Jr. is even more impressive. While players like Bonds, McGuire, and Sosa were juicing, Junior maintained a steroid-free regimen that has resulted in a positive public perception that has followed him to this day. When searching for baseball cards from players who shined the brightest during the late 90’s, it is nearly difficult to find investment opportunities due to a combination of junk wax and steroid use. While players such as Bonds and McGuire are haunted by the accusations of cheating, which has also impacted their ability to earn a place in Cooperstown, Griffey Jr. is still loved by both fans and the media as a player who refused to take a short cut at a time when short cuts were far too common.

• Five-tool Hall of Famer. Alright, so Junior did not cheat, but how great of a ball player was he? From 1996-2000 Griffey Jr. hit 40 or more home runs plus drove in at least 118 runs in each season. Junior was named league MVP in 1997 and was voted to 13 All Star games during his 22-year career. In the field he was just as sensational, with 10 Gold Gloves and a highlight reel filled with ‘web gems’, for those who watched Baseball Tonight on ESPN throughout the 2000s. Junior ranks seventh all-time with 630 home runs and it does not look like anyone will jump ahead of him anytime soon. There are no active players within 100 home runs of Jr. and his total sits ahead of other 1990s – 2000s power hitters such as David Ortiz and Jim Thome.

• Limited print run in the junk wax era. When faced with the threat of overproduction and over-grading, there is only one solution. Buy cards that were printed within a limited quantity. In an era marred by oversupply, the Bowman Tiffany set delivers a level of reassurance that was difficult to find in the 1980s and 90s. Just how junk-filled was the junk wax era? There is a chance that there was more than 1 billion cards printed from the 1992 Donruss set alone, so yes, the oversupply was real. Enter, Bowman Tiffany. The well-known 1986 set, recognized for its Barry Bonds rookie card was a print run of 5,000 sets. This 1989 set includes a similar quantity as the Bowman parallel totaled 6,000. The percentage of PSA 10s has also remained low for this card as there are 156 gem mint copies in the PSA database out of more than 1,500 graded examples. When buying cards from the junk wax era, it is important to track population growth as well. Since last April, there has not been a single PSA 10 added to the population and only 59 more Griffey cards from this set have been graded. Compare that to his 1989 Bowman base card and you can see the importance of limited quantity. In that same 11-month time span, PSA has graded over 2,100 Griffey cards and has added 190 PSA 10s. It is difficult to find opportunities in this era, even with some of the greatest players to ever step onto the diamond. That said, the limited population and grading stability are bullish signs for this Griffey Jr.

Bear Case

• Questionable Griffey fractional returns. The only other Ken Griffey Jr. card Rally has offered to date is a 1989 Upper Deck Rookie Card. Rally offered that in July and the BGS 10 graded example is down -12.5% since IPO. The card is currently trading below comps, as the most recent sale for a BGS 10 was for a card with the same average subgrade that sold for $18,087 in December. Based on previous sales and reasonable comparisons, this Bowman Tiffany IPO opens at a market cap that is under fair market value as the most recent sale for a PSA 10 example sold for $13,800 in July and an appraisal would ping this value closer to $16,500. The question though is whether or not there is an appetite for Junior on Rally. At the time of writing there are only 9 bids (buy orders) in the order book for the Griffey Jr. card that is currently trading, compared to 92 asks (sell orders). When you zoom further out, outside of the 1986 Fleer Jordan, there has not been a buyout offer accepted for a sports card from the 1980s which could raise questions surrounding liquidity potential due to the lack of volume on the secondary market.

• Limited and volatile auction performance. In what was a banner year for sports cards, there were less than ten public sales of PSA 10 Bowman Tiffany Griffey cards in 2021. That on its own is not a bear case, as the limited sales numbers could be due to a limited population. The bear case is that the three most expensive sales ever for this card occurred in February and March of last year and the other six sales all fell well under those late first quarter valuations. After prices peaked above $20,000 to start the year, they dove under $11,000 by May. They never fully recovered during the summer and the last sale in July is still nearly 35% below the prices realized in the late winter of last year. The rollercoaster of 2021 impact nearly all sports cards, as prices exploded in the first few months before tapering off in the second and third quarter. The primary issue here though is there is no definitive evidence that prices for this specific card have recovered.

• Will Griffey cards ever be appreciated? To be fair to Ken Griffey Jr., it’s nothing personal, it’s just the era. Cards from the late 1980s and early 1990s have struggled to gain traction over the last 30 years. While the list of six and seven figure cards has swelled exponentially in the last twelve months, this Griffey card has never surpassed $25,000. While that could be viewed as an opportunity, the bearish case lies in the lack of catalyst potential for this card. Ken Griffey Jr. is a baseball legend, but he’s already a retired Hall of Famer. He earned over 99% of votes for the Hall and will forever rank as one of the greatest hitters in the game, but his cards are still more than $75,000 away from six figures during what has been the most sizable appreciation in sports card history.

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1963 Beatles Fan Club Signed Card

3/2 @ 12:00 PM ET

Valuation: $25,000

Bull Case

• The blue-chip brand of The Beatles. In sports cards, there is Mickey Mantle and with wine, it is Romanee-Conti. In any investible asset class, there is a select players, producers, or artists who fit within a top-tier or ‘blue-chip’ label. They are the assets that have demonstrated long-term appreciation with an ample flow of liquidity. To see the impact of Beatles memorabilia, just look at a list of top album sales. To date, the highest price ever paid for a commercially released album was $790,000 in 2015. That record was Ringo Starr’s personal copy of the “White Album”. In 2016, three different albums from The Beatles including a sealed stereo copy of “Yesterday and Today” sold for more than $70,000. This is an example of where fractional investing offers new markets and opportunities to non-accredited investors. The world of music memorabilia is wide but there are a limited number of artists and bands that have produced work which has demonstrated long-term price stability. The Beatles are one of those bands, and the majority of their top-tier memorabilia has reached a point where the majority of the population is now priced-out.

• Fractional appetite for Beatles memorabilia. This is the second Beatles offering on Rally. The first, a signed “Love Me Do” single, received a buyout offer just weeks after IPO. The offer, which promised a 37.5% return in a very short period, was rejected, with just 43% of shareholders voting to approve. This suggests that the appetite for memorabilia of one of the most popular bands in history is strong, and to date, largely unmet.

• Immediate catalyst on the horizon. RR Auction will sell another signed Fan Club card on March 9th. That card is not PSA encapsulated, but has been authenticated by Real and has strong provenance from a London Playhouse Theater employee. With over a week remaining, bidding is over $11k (pre 25% buyer’s premium), with 20 bids notched thus far, indicating that there may be a healthy crop of bidders prepared to compete. Reaching the low estimate of $20k would provide validation for the purchase of the offered asset at auction for $22k, and nearing/exceeding the offering valuation of $25k would further solidify the short term outlook. Though early activity is promising, the appearance of this item at auction so soon after IPO also presents risk should it fall short of expectations.

Bear  Case

• Sales record spotty and lower pre 2022. Because the fan club card is as old as it is, there are varying conditions, and varying circumstances surrounding the signatures, it’s difficult to compare sales in an apples-to-apples fashion. Still, before the sale of this particular card at RR Auction in January for $21,889, the historical sales record was spotty, and was significantly below that sale and the valuation at IPO. The prior high sale was $10,625, all the way back in 2007. The next three sales offered as comps were all lower than that level, reaching $9,310 most recently in 2017. The $25,000 IPO valuation represents a 169% increase on the 2017 sale, or a 22% annual increase. A bear may argue this type of increase is only justified at the higher end of Beatles autographs, as 1963 autographs are considered more common, with hysteria limiting the band’s availability in the years to follow.

• The secondary market stumble of music memorabilia. Although the “Love Me Do” single has already attracted a buyout offer, the offer demonstrates an external demand that has yet to be displayed internally within the Rally platform. While they are by no means directly comparable, there are three guitars trading on Rally’s secondary market and all three have dropped significantly from their IPO valuations. The guitars are the only examples of music memorabilia trading currently and their performance, at least for now, does not instill much confidence in the sector. The Carlos Santana Gibson SG Guitar is the ‘best’ performer out of the trio and it is down -20% while the Eddie Van Halen guitar and Slash Double-neck (one day of trading) have tumbled -43.55% and -70% respectively. The “Love Me Do” single opens for trading next week and would immediately become the best secondary market comparison we could use for this Fan Club Card but at this time it is the guitars which gives us our only insight into the market. Whether or not offerings featuring The Beatles will be disconnected from other pieces of music memorabilia is a question that won’t be answered until after this card opens.

• Unproven asset and asset class. The emergence of democratized investing has allowed anything and everything to become an investible asset. Whether or not fractional investors view them as such has led to increased volatility across asset classes. There are plenty of assets and sectors that have struggled to find their footing across the various alternative asset platforms and if you need evidence, just review and compare performance by asset class on our asset table. This is the first fan club card offered on Rally and as previously mentioned, there are no pieces of Beatles memorabilia currently trading on Rally. There are plenty of interesting assets on Rally that have performed poorly - take for example the Triceratops Skull which is down -31% on their secondary market. To date, assets which receive the most headlines and carry the biggest following, such as sports cards and NFTs, have demonstrated superior levels of performance and liquidity compared to more nuanced pieces of memorabilia. That is not to say that the market won’t flip and we will see more appreciation of memorabilia and documents on Rally, but there is not enough evidence yet to show that the appetite is large enough yet when there are so many other offerings available.