Photo: Rally
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. In this edition, we focus on the fully signed album of a rock legend.
1969 Led Zeppelin I Album (Signed by Original Band)
Rally
5/12 @ 12:00PM ET
Valuation: $48,000
Bull Case
- Iconic band, significant influence. Led Zeppelin is close to the peak of iconic bands, with select few acts attaining greater success and notoriety. Eight consecutive number one albums in the UK. Six number one albums in the US. Hundreds of millions of albums sold. The band effectively owned the 1970s, frequently setting attendance records on tour, including those notched by the Beatles a decade earlier. The Recording Industry Association of America ranks Led Zeppelin 5th all time in certified unit sales, behind The Beatles, Garth Brooks, Elvis, and Eagles. Led Zeppelin's influence in heavy metal and hard rock is far reaching and significant, and the band's music remains relevant today. For example, the use of "Immigrant Song" in Thor Ragnarok created some of the more memorable moments in recent Marvel franchise history.
- Full signatures a rarity. At RR Auction, where Zeppelin signed albums have sold most frequently, lot descriptions often note “there are said to be fewer than thirty known fully signed Led Zeppelin albums extant". This seems to be purely anecdotal, but across over a decade of auction activity at RR, Julien’s, Heritage, Goldin, Sotheby’s, Christie’s, and Bonham’s, we count just 21 fully signed albums/album covers. Surviving supply from the 70s would surely be stifled by the passage of time, and the tragic death of John Bonham in 1980 meant that such supply could not grow. Additionally important in the rarity of full Zeppelin signatures is the band’s quick rise to prominence. The band formally debuted in late 1968; by 1969, Led Zeppelin II reached #1 on the charts. This meant early superstardom and therefore a shorter phase of accessibility than other acts (and their fans) enjoyed. Opportunities such as these, where an authenticated example in strong condition is essentially in the shop window, may be few and far between for those with deep pockets that spent their youths seeing the band on tour.
- Track record of appreciation. The history of appreciation for Zeppelin signed albums is strong, even if consistency is somewhat varied given the differing presentation and condition of copies. Back in the late 2000s, fully signed copies of Led Zeppelin I were selling in the mid-to-high thousands: $6,000 at Christies and $8,486 at RR in 2008. By the mid-to-late 2010s, values had risen into the $20,000 and even $30,000 range: $28,850 at RR in 2016, and $22,956 and $32,156 at RR in 2019. Appreciation continued to the $42,000 Goldin sale in February of this year. The pattern is similar for other Zeppelin albums. Led Zeppelin II sold for 1,800 GBP in 2005 at Christie’s, with values quickly escalating to $10,800 in 2006 at Christie’s and $10,000 in 2009 at Julien’s. By the late 2010s, values more than doubled, with sales at RR of $25,181, $22,724, and $27,261 in 2016, 2017, and 2018 respectively. The results are illustrative of continued strengthening appetite for fully autographed Zeppelin assets, without a sudden 2020-21 explosion that might give prospective investors reason to be more skittish.
Bear Case
- Preferable substitutes? It bears noting that there have been two music memorabilia offerings bearing all signatures of The Beatles. The Love Me Do Single currently trades at $28,800 (having gained 20%) and the Fan Card was offered at $25,000. Unquestionably, the supply of Beatles autos is indeed higher than that of Led Zeppelin’s. Be that as it may, at this stage, fractional investing is as much (if not more so) about investor psychology as it is fundamentals, which may make those Beatles offerings at lower valuations more attractive candidates to capture fractional demand, due to the band’s greater influence and continued impact. For reference, both defunct bands have Instagram accounts with impressive followings, but The Beatles’ 4 million is well in excess of Zeppelin’s 1.5 million. This offering need not be a referendum on the merits of Led Zeppelin versus the Beatles, but fractional investing shouldn't be a game of quantity, and a bear may see more appealing opportunity with the lads from Liverpool.
- Priced well above peak. Rally purchased this album at Goldin in February of 2022 for $42,000 in what appears to have been a competitive bidding session, with 35 bids in total and 6 bids from 8:00 PM onwards on the night of the close. At the time, that price was close to 20% more than the next highest price paid for a signed Zeppelin album, which was $35k for Led Zeppelin III at RR Auction in July of 2021. At $48,000, the offering is priced 14% higher than the Goldin sale. This may take some short term appreciation off the table for fractional shareholders. The value will be put to the test at Julien’s on May 22nd, as a fully signed copy of the same album comes to the block. The signatures are more faint, and both the record of authenticity and provenance are unclear, but the estimate of $2,000 - $3,000 surely raises some eyebrows. Notably though, a fully signed copy of Led Zeppelin IV sold at Bonham’s earlier this month for approximately $39k USD (31,800 GBP). This is perhaps a strong confirmation sale for the Goldin result, but its support of the offering valuation - which is 23% higher and for the debut album - is up for debate.
- Limited fractional music memorabilia track record. Outside of guitars, there’s a relatively limited track record for music memorabilia trading fractionally. There’s the aforementioned signed Beatles Love Me Do Single, which is up 20%, but there’s little to be understood about fractional demand from one item corresponding to one band. Investors will be flying blind in terms of how the offering might be received on secondary markets and if better entry points are likely to be found. For what it’s worth, the four guitars trading fractionally are down 56% on average through May 6th, though that feels unlikely to provide much read-through for this asset.
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