Bull Case Bear Case: The Week of January 17th (Pro Edition)
January 18, 2022
Dylan Dittrich, Bradley Calleja
Welcome to the second 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!
1952 Topps Mickey Mantle (PSA 7)
1/18 @ 2:30pm ET
Iconic card featuring an iconic player. It’s the ideal recipe for a collector or investor that is trying to limit risk while balancing a history of long-term appreciation. There is no card that better epitomizes those values than the 1952 Topps Mickey Mantle. In a tier that is shared with the T206 Honus Wagner, the ‘52 Mantle is the most well-known sports card ever produced. This PSA 7 example is one of just 76 to earn a near mint designation and falls within the top 6% of the total graded population. This IPO also gives investors on Collectable the opportunity to add a second 1952 Topps Mantle to their portfolio, as the platform offered a PSA 8 graded example last year. This means that 2% of all near mint through gem mint 1952 Topps Mickey Mantle cards are currently available on Collectable.
The Mantle market has momentum. Baseball cards from the 1950s are up 15.42% on Collectable’s secondary market while the total average return for sports cards on the platform is just 1.91%. More specifically, Collectable has offered two Mantle’s from 1952, and both have outperformed the average significantly. The 1952 Bowman Mantle is up 153.3% overall, while the PSA 8 Topps ‘52 Mantle has gained 142.5%. After auction prices peaked in the spring, they pulled back significantly, in some cases experiencing 60% declines depending on card/grade during the summer. These prices have since shown signs of recovery though and now sell 20-30% below the February-April ranges.
Stability and reliability. If you are looking for 10x returns, the Mickey Mantle market is not where you should be looking. If you are looking for a low volatility asset relative to the rest of the card market, the 1952 Topps Mickey Mantle is the market to explore. While other alternative assets such as art and wine have extended track records of performance to base investment decisions on, the number of card prices that have been tracked and registered over the last 20+ years is limited. One card that has been followed over the years, even before this most recent card craze, is this 1952 Topps Mantle. Business journals such as Forbes have published articles comparing Mantle appreciation to the S&P 500 and no player is more represented within the PWCC indices than this Yankee legend. As the calendar turns and we step into a period of uncertainty within the card market, certain cards will continue to provide a level of long-term assurance, even if prices shift lower.
Reserve not met. This exact card was featured in the Holiday Auction hosted by Goldin less than a month ago and failed to reach its reserve. The card climbed to $240,000 early in the final week of the auction but did not attract another bid as the final hammer dropped. If there had not been a reserve the $240,000 result would have been the lowest price paid for a PSA 7 since May. The result was part of a larger array of Mantle cards that went unsold during the auction and were highlighted in our Auction Action. Was the lack of a sale due to a high reserve or a broader sign for the overall Mantle market? Investors could have an answer soon as there is a PSA 7 graded Mantle with decent eye appeal qualities that will sell at PWCC this weekend. The card carries a current bid of $180,000 with four days remaining in the event.
Eye appeal in question. As with any vintage card where the profile is encased with a thick white border, attributes such as centering play a critical role in the valuation process. Anyone who does not believe eye appeal is important is ignoring sales history - take the 1986 Fleer Michael Jordan Rookie Card. On July 11th, Goldin sold a PSA 10 for $270,600. Then, less than a week later on July 17th, PWCC sold a PSA 10 with elite eye appeal for $840,000. While that 3.1x multiple between sales was more significant than usual, it is common to see prices fluctuate by 1.4x - 1.7x based on centering and coloration differences alone. This specific Mantle shifts to the left and sits high on the white canvas. This card is still an exceptional example and rightfully earned its Near Mint designation but this is not the card that will be establishing new price targets for the PSA 7 population.
What will 2022 bring for vintage cards? While it is highly unlikely the vintage Mantle market will collapse due to consistent demand and a reliable track record, it seems just as unlikely the market will continue to display the year-over-year growth realized between 2020 and 2021. While the 2021 spring sports card bull market feels like it was years ago, it can be difficult to remember the card market through the 2010s. The first 1952 Topps Mickey Mantle PSA 7 to break six figures was sold in 2016 for $161,100 and there wasn’t a sale that exceeded $200,000 until 2021. Then in 2021, not only did prices consistently close above $200,000, they reached $350,000. Prices for 1952 Mantle cards were range-bound for five years between 2016-2021 and ever since the explosion in prices during the spring, have been range-bound once again through the fall and winter.
2007 Upper Deck Black Quad Auto - Jordan, Kobe, LeBron, Magic (BGS 7)
1/19 @ 2:30pm ET
Cultural relevance x 4. It’s difficult to think of a more culturally relevant combination of four players in NBA history than the ones captured on this card. Each, at different precise moments, have been the standard bearers carrying the NBA to the heights at which it sits today. While they have appeared in different combinations on a number of cards over the years, it is a rarity to see all four on one, particularly with the autographs graded a 10 by BGS. With the autos being the focus of the card, that grade is especially important. Quad or triple auto cards featuring a selection of these players are not uncommon, but more often, one of them is replaced by another, less-desirable great (i.e. Carmelo Anthony).
Six figure encouragement. It hasn’t been uncommon to see cards featuring multiple signatures from a selection of these athletes garner six figures at auction. Most recently, in October, a 2004-05 SP Authentic Triple Signature featuring Jordan, Kobe, and LeBron (graded BGS 8.5 but from a larger print run of 25) sold for $314k. Back in May, a 2008-09 SP Authentic “Sign of the Times” Jordan, Kobe, LeBron triple auto (graded BGS 8.5, Auto 9) sold for $241,200. Perhaps more relevant, a triple auto from the same set as the card here, 07-08 Upper Deck Black, featuring Kobe, LeBron, and Jordan’s signature sold for $145k in January of 2021. All this is to say, in the right moment at the right auction, there is evidence of strength in results. Bulls will be additionally encouraged by the raw sale of a card from this print run, sold for just under $40k way back in October of 2022, pointing to the premium from grading as well as market appreciation since.
More favorable basketball environment on the horizon? Basketball has struggled on Collectable to date, underperforming other sports with -0.6% performance according to Collectable’s proprietary indices. However, those struggles come against the backdrop of a basketball card market that has stabilized since a rapid freefall in the late spring and early summer, with values retrenching and beginning to climb higher. The spring months, when football season has ended and spring training has yet to begin, have a history of being favorable to the basketball market, particularly in 2021, and a bullish investor may see an opportunity to deploy capital into weakness.
Fractional difficulties for similar cards. Similar cards featuring autos and/or patches from multiple players - albeit greats - have not fared well on Collectable to date. The list is exhaustively negative in terms of performance. Returns quoted are through the week ending January 14th. 2004-04 Dual Logoman Magic/Bird (-26.5%), 2005-06 SP Authentic Sign of the Times Jordan/LeBron (-15%), 2005-06 Triple Authentic Signatures Jordan, LeBron, Magic (-34%), 2007-08 Exquisite Triple Patch Auto Jordan, LeBron, Magic (-18%), 2004-05 Dual Logoman LeBron, Carmelo (-39%), 2008 UD Triple Logoman LeBron, Carmelo, Bosh (-40%). Whether it’s the lack of readily available, recent comps or lessened desirability versus well-known and well-trafficked individual cards, this type of offering has generally not gained traction amongst the fractional crowd and has seen its secondary market performance suffer as a result.
Concerns from market timing. It’s worth noting that this card was consigned very close to the peak of the basketball card market in April 2021. Per the offering circular, the date of consignment was April 13th. So, even though the IPO comes in January 2022, the valuation may be more at home in April 2021. Back in December of 2020, the rarer /5 edition of this card in BGS 7 condition sold for $29,520 (though it did have a 9 auto vs. 10 here). A bearish investor might have been able to see the path to effectively 4x (and then some when you figure that this is the /10) back in April, but after the market consolidated over the summer, they may have trouble with that path today. Consider how the market developed for other high-end basketball cards featuring the players here. LeBron’s Topps Chrome Refractor Rookie in PSA 10 condition sold for $54,000 at Goldin in December 2020, peaked in March at $266k, and most recently sold for $77.5k. Or Kobe’s Topps Chrome Refractor Rookie in PSA 10 condition. In December 2020, it sold for $134k. It saw sales above $300k in March and May. It most recently sold for $228k. A very nice gain, but 4x, 3x, or even 2x, it is not.
Supply risk. For today, this card is the highest - and only - graded card in the BGS population. There are no PSA graded examples. We have definitively seen one other card from the print run of 10 in the wild, sold raw for just under $40k in October of 2020. We believe there to have been another unsold eBay listing for #10/10, but since the listing is well past expired, we can’t ascertain the serial number with certainty. Should additional cards find their way into the graded population - particularly at a grade higher than a 7, it puts this card’s status at risk. Given that the set is from 2007, a more bullish investor might argue this is not highly likely, while also pointing to the only other graded card (from the “gold” set numbered to 5) receiving a BGS 7 as well. Other supply concerns arise from the proliferation of other multi-signature cards from similar combinations of stars from other sets, lessening the perceived scarcity of the 10 card print run.
1972 Wilt Chamberlain Game Used Jersey
1/20 @ 2:30pm ET
Mythological status. Wilt Chamberlain may not be considered the best player of all time, but his status as the NBA’s most mythological legend is relatively unchallenged. Basketball’s Babe Ruth. While those that missed Jordan’s career can get highly acquainted in relatively short order via the unending slew of documentation, the same can’t be said for Wilt. That’s not to say there aren’t highlights and footage, but word-of-mouth from those that were there has grown his legacy to heights from which it has not wavered. There’s the famed 100 point game, yes, but he was also a 7 time scoring champ, is first all time in total rebounds, second all time in win shares, sixth all time in player efficiency rating, and second all time in points per game (.05 ppg behind MJ). The man averaged 30 points and 23 rebounds for his career. Had he not existed at the same time as Bill Russell and his Celtics, to whom he lost 7 of 8 playoff series, it’s possible we would consider him the best player ever. If this jersey is indeed from 1972 as is believed, then it corresponds with a championship winning season for the Lakers, and also to the longest winning streak in history (33 games), which ended January 9th. One more for good measure. At 7’1, Chamberlain is said to have had a 50 inch vertical. As a result, Wilt was able to dunk free throw attempts. Seriously, he could take off from behind the free throw line with just a few steps and dunk. The NCAA instituted a rule change to prevent this practice. Now, is that 100% verifiably true? Or is it myth? That we have to ask says it all about the unmatched mythological status of Wilt Chamberlain.
Track record of appreciation. Some sports memorabilia items have a spotty or volatile trajectory of values and returns, but the data for Wilt jerseys from this era is fairly encouraging. Key data points include $22,705 in 2005 at Heritage, $60,667 at SCP Auctions in 2013, and of course, $108,000 in 2020 at Goldin for this jersey. Over the last fifteen years (dating until the Dec 2020 sale of this jersey), sale prices for comparable jerseys have risen in the range of 8-11% annually, and there may be room for improvement if the gap in performance to other assets is to be closed. Over a similar period, Wilt’s card prices have experienced annualized increases in value of more than 20%, though it should be noted that much of that has come at the back end of the period. Similarly, though a more recent phenomenon, tickets to Wilt’s 100 point game have increased in value by an annualized figure of closer to 30% over the last decade.
Strong fractional performance. While sports memorabilia did not broadly thrive in fractional in 2021, Collectable’s Wilt offerings were immensely successful. Across both cards and memorabilia, fractional Wilt offerings have an average return since inception of 111% as of 1/12. His high school uniform and rookie uniform have returns of 168% and 99.9% respectively. Fractional demand for Wilt is clear, as is high end collector demand. The PSA 9 1961 Fleer Wilt card was bought out at a 66.5% net premium to the IPO price before it even began trading, while the rookie uniform received a $2mm buyout which would have netted shareholders 49% since IPO months earlier. Just 18% of shareholders approved that offer, suggesting there is a long term appetite for the player and related high-end assets.
Valuation running ahead of the market. This jersey sold at Goldin in December of 2020 for $108k. Also in December of 2020, a PSA 8 example of Wilt’s 1961 Fleer rookie card was selling for $33,600. Most recently, that card sold for $50,400, an increase of 50%. An increase of 50% to the jersey’s value would yield an updated worth of $162k. That being the case, there would be concerns that the IPO value has pulled forward the annual returns experienced in the past, leaving limited upside in the near and longer term. However, the jersey was analyzed and authenticated by Resolution Photomatching since the Goldin sale, which brings us to…
Photo-match inconclusive. Resolution Photomatching was unable to conclusively match the jersey to images from early 1972. While they determined “likely” photomatches to the 1/9/72 game and “possible” photomatches to the 1/5/72 game, there was no definitive matching. While an investor would be comfortable with the authenticity of the jersey and the era in which it was worn, absent a definitive match, a bearish investor would likely be unable to reconcile the premium valuation assigned versus the 2020 Goldin sale, even after taking into account market appreciation.
Category challenges. Wilt memorabilia performance has been strong and led the sports memorabilia recovery in the third quarter of 2021. Since then, however, the broader category has been immensely challenged. The return of the Altan Insights Fractional Sports Memorabilia Index in the fourth quarter was -16%. The average ROI of sports memorabilia assets across platforms that began trading in Q4 of 2021 is -19%. That figure for specifically Collectable assets is -20%. As a result, there may be a more attractive entry point for fractional investors than the IPO value in the near future.
1970-71 Bobby Orr Photomatched Jersey
Early Access (official opening not clear
Unrivaled resume. Perhaps Orr isn’t worshiped like Gretzky by the more casual hockey fan, but to those in the know, he ranks very highly (think: easily top 5) among the best players of all time. Keep in mind as we list these achievements that Orr was a defenseman. Nine time All Star. 3x Hart Memorial Trophy Winner (MVP). 8x Norris Memorial Trophy Winner (Best Defenseman) - all time leader. 2x Stanley Cup Champion, Conn Smythe Playoff MVP both times. Led the NHL in points twice (only defenseman to do that). Led the NHL in assists five times. 3rd all time in assists per game. 2nd all time in Plus Minus. 5th all time in points per game. Orr simply changed the sport with his attacking abilities as a defenseman, demonstrating unparalleled speed and power.
All-time season. In the 1970-71 season, which this jersey is believed to be from, Orr became the first player (ever - defenseman or otherwise) to reach 100 assists in a season, set the defenseman records for both points and assists in a season, set the record for highest single-season plus minus by a defenseman, and won the Hart and Norris trophies. The match was conducted by Resolution Photomatching, which most notably conducted the photomatch for the three most expensive basketball jersey sales of all time. In 2019, Classic Auctions sold Wayne Gretzky’s regular season home debut jersey for $221k. At the time, it was advertised as photo-matched, but without a letter from a photo-matching service. At Heritage two years later, with MeiGray photo-matching, it sold for $660k. This Orr jersey was photo-matched by similar standards when it sold at Classic Auctions in February of 2021 for $209k. With the photomatch completed by Resolution between then and the IPO almost a year later, a bullish investor may find the increased $399k valuation more than palatable.
Track record of high-value sales. Six figure sums for Orr jerseys are not a new phenomenon. Orr jerseys, not more spectacular than this one, have attained six figure results at auction since the mid 2000s. In fact, a jersey believed to be from the very same season sold for $135k at Leland’s in 2006. While the card market has skyrocketed since (whatever multiple you use, it’s significantly more than ~3x), memorabilia’s appreciation has been slower, particularly over the last two years. Bulls would argue that the category is due a catch-up period. An already Resolution-matched jersey believed to be from the same season sold at Heritage in August of 2020 for $150k. That this jersey, not yet Resolution-matched, sold for $209k in February of 2021, 46% higher, is perhaps indicative of a market for these items that is beginning to advance.
Market inertia challenging to overcome. While bulls might argue memorabilia is due a moment in the spotlight relative to cards, bears might argue that the consistent laggard status has persisted for a reason. That esteemed Orr jerseys have been selling in the low to mid $100k range since the mid 2000s and have only recently nosed just above $200k is suggestive of a long term return profile in the low to mid single digits. Given the range bound nature of results over the course of a decade and a half, the $399k valuation may prove difficult for investors to swallow. The volatile and not upward-trending NHL viewership numbers over the last decade will do little to assuage these concerns, though there is some reason for optimism as the league begins its new deal with TNT and Disney (ESPN).
Photo-match uncertainty. To be clear, the photo-match appears quite conclusive. The concern, however, is that the match is conducted to two undated images. These images are believed to be from 1971, and there are other supporting details - relating to the stamp on Orr’s stick in one photo and the contract in question in the contract-signing photo. There’s very little reason to believe the jersey isn’t from 1971. Rather, the point is that the increased credibility of the Resolution photomatch is not likely on par with the Gretzky jersey, for example, where multiple specific games were matched. It’s not uncommon to see a photo-match add multiples of value, but the photo-match must significantly advance the effort of placing the item on the player at a specific point. Therefore, the corresponding increase in valuation here (nearly doubling in less than a year), where those advances are perhaps lacking, may not appeal to a bearish investor.
Long fill time. This asset has been open for early access since December 26th, with considerable press coverage since. Should the asset not fill quickly upon its official opening, about a month later, there may be greater ask volume than bid volume when the asset opens for secondary trading. Assets following a similar path to full-subscription have experienced challenged trading debuts.
Cultural relevance. From the fame gained through her tennis talent to opening more eyes to mental health challenges, Osaka has taken a lead role as a fundamental piece among the next generation of athletes. At just 24 years old, Osaka has won four grand slam titles, securing wins at the Australian and US Open twice each. She reached the top of the WTA rankings, and lit the cauldron in Tokyo to kick-off the most recent Olympic games. Osaka has also made the TIME 100 list each of the last three years and looks to be the tennis star who will take the torch from Serena Williams as the face of the sport. She has also developed a strong social media presence with 2.8 million followers, placing her within the top five among active tennis players.
Could tennis be primed for a breakout? In 2021, ESPN reported that the US Open garnered 881,000 viewers during peak prime time slots, which was a 33% year over year increase. Viewership numbers are still down from 2019, when they peaked above 1.2 million, but the 2021 performance marked the second time the sport crossed over the 800,000 threshold in five years. Adding to the recent rebound (or volley - tennis joke), Netflix announced a behind-the-scenes series that will follow the ATP and WTA Tours. Filming for the show is already underway in Melbourne for the Australian Open and while a release date has yet to be confirmed, the concept seems similar to the F1 docuseries ‘Drive to Survive’, which is credited for bringing more attention to the international racing circuit.
Show me the money. For the second consecutive year, Osaka was the highest-earning female athlete in the world with over $57 million in total earnings. That also places her 2nd among all male tennis players behind only Roger Federer who raked in $87 million last year alone. What is most impressive about Osaka’s financial proceeds is how little of it came from her earnings on the tennis court. Nearly 96%, or $55 million out of her $57 million, came via sponsorships with global brands. Deals with companies like Louis Vuitton, Mastercard, Nike, Sweetgreen, and Tag Heuer have helped propel Osaka up the Forbes rankings, even while her WTA ranking fell from 2nd to 13th.
It is a different world today than yesterday. There were multiple PSA 8 graded examples sold in 2020 for less than $400 and then in 2021, PWCC sold a PSA 9 for $13,400 which completely reestablished the market. The $13,400 sale came out of nowhere and most importantly, occurred under much different circumstances. When the card sold in February it was the only PSA 9 with none graded higher. Today, there is a graded population of 43 cards, with one PSA 10 and six PSA 9’s. When the PWCC sale closed, the PSA 9 sold was the top copy on the market. When Rally’s PSA 9 opens to investors this week, it is still one of the highest graded examples but is now in the top 16% instead of the top 1%. The Osaka market is changing so fast that when this card made its first appearance in Rally’s SEC filings, there were only five PSA 9’s and the PSA 10 had not been graded yet.
Tennis trails the field. In a market where six-figure prices are now commonplace and seven-figure sales no longer turn heads, tennis is still looking for its first $100K card. Serena Williams cards have demonstrated strong returns in the last year as a 2003 NetPro Apparel Auto card sold for $44,280 in October and then a Elite Glossy card set a new record with a $55,200 sale this month, but there is one really important factor - it’s Serena Williams. Osaka’s career is off to a great start, but it is unfair to compare her card prices to the most dominant athlete to ever pick up a tennis racquet. While it looks like it will take a numbered Serena rookie card to finally break down the six-figure barrier, other names like Osaka, Barty, and Kenin have yet to establish themselves within the card world, with the exception of one Osaka sale. Until a Serena card breaks six-figures and a young star emerges with consistent price appreciation, there will also be a relatively low ceiling for tennis cardboard while other sports see a consistent flow of high profile sales.
Will Osaka return to the top in 2022? This is a factor that will play out in real-time, and the first rendition of 2022 is taking place over the next couple of weeks in the country down-under. Osaka is the 13th seed at the Australian Open and cruised to a first round win on January 16th over Camila Osorio. Even with her lower than usual seed, Osaka carries the second-best odds to win the Aussie Open title at 15-2, behind Ashleigh Barty who closed the weekend at 11-4. Osaka had a down year in 2021 and will need to right the ship soon or card prices could suffer. The Australian Open is key for Osaka who has shown favoritism towards hard court surfaces compared to the French Open and Wimbledon which are played on clay and grass respectively. With only one five-figure sale to date, if Osaka is unable to replicate her early career success, the door could open for a different young tennis star to emerge as the choice among collectors and investors.
Mutant Ape #5750
1/18 @ 12:00PM ET
Rapidly increasing cultural relevance for BAYC. Demand for Bored Ape NFTs and, consequently, their prices have increased dramatically in recent months, owing to strong brand activation, media integration, key partnerships, celebrity adoption, and community experiences. To date, the average sale price in January for Bored Apes is $295k, up 14% from December and 77% from September. The project continues to gain traction and attention from influential parties; for example, both Snoop Dogg and Eminem have recently purchased Apes and are expected to integrate them into the Super Bowl Halftime Show (a potential catalyst). Yuga Labs continues to strengthen the brand, engaging in partnerships for Ape-centric play-to-earn gaming as well as other media opportunities. Per data from Dune Analytics and analysis from Altan, Mutant Ape floor prices have shown a strong 0.83 correlation with BAYC floor prices since the end of August, and the strength of the original project continues to trickle down to the derivative, with the MAYC average sales price in January up 50% from December and over 202% from September.
MAYC finding increased relative value. While MAYC may always be viewed as a derivative of BAYC, the stratospheric performance of the “parent” NFT has rendered it less attainable to many and reduced the amount of liquidity in that market. With MAYC providing a related and more attainable expression of a similar bullish Yuga and NFT thesis, there is potential for the gap in relative value between the two projects to continue to close. Over the last several months, per data from Dune Analytics, the floor price of MAYC has grown increasingly large as a percentage of the floor price for BAYC. A bullish investor would believe in the persistence of that trend.
Strong fractional performance. Performance of both Bored Apes and NFTs in general has been quite strong on fractional platforms. The lone Bored Ape to begin trading, #601, is up 390% despite debuting in a weaker environment for high-end fractional markets. Three other Apes have funded quickly on Rally. The average ROI of NFTs trading fractionally is 186% across platforms and 236% on Rally, though these numbers are of course skewed by Punks that were brought to IPO well below market valuations.
Heavily reliant on Yuga Labs efforts. While some NFT values have been sustaine