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Bull Case Bear Case: The Week of January 31st

Bull Case Bear Case: The Week of January 31st
February 1, 2022
Dylan Dittrich, Bradley Calleja

Welcome to another 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, and don't forget to subscribe to Pro for a look at an even larger slate of offerings!


2019 Luka Doncic Game Worn & Signed Sneakers

2/1 @ 2:30PM ET

Valuation: $82,000

Photo: Collectable

Bull Case

  • Rookie sneaker of rising star. It’s easy to forget that Luka Doncic is still just 22 years old and in only his fourth season in the league. Because of his immediate success and acclaim upon entering the league, it feels like he’s been around longer. Just three and a half seasons in, his resume is already impressive: Rookie of the Year, two All Star Game appearances (with a third likely on the way), First Team All NBA twice, and already 11th in all time triple doubles. Should he continue on this trajectory, winning MVP awards and titles in the future, he has the potential to enter the pantheon of greats. That of course would make a key piece of signed, game-worn, and photomatched memorabilia from his rookie season a valuable commodity.
  • Growing sneaker profile. Interestingly, Luka does not yet have a signature sneaker. He currently wears a Player Edition of the Air Jordan 36, featuring his new logo, and the expectation is that a signature sneaker is on the way. Should that be a success, it may be the start of a strong sneaker legacy for the player, which would liken rookie game-worns to Jordan’s Air Ship or Kobe Bryant’s EQT Top Ten 2010 (pre-signature sneakers). Luka is also notable in sneaker circles for swapping out sneakers relentlessly. Twitter account @lukadonkicks, which tracks the player’s sneaker models of choice and performance in them, has noted that he swapped sneakers at halftime 21 times during his rookie season. So, that these were photomatched to five games makes them a relative rarity in their consistency of use. While Luka’s individual sneaker profile may stand to grow, there has been growing demand for game-worn sneakers in recent months. While the $1.472mm sale of Michael Jordan’s Air Ships at Sotheby’s in late 2021 was a catalyst, two six figure sales of rookie-worn, non photo-matched Kobe Bryant sneakers at Heritage in December (for $192k and $156k respectively) provided evidence of broader category strength, destroying previous sales marks for similar pairs. Two sneaker buyouts - $203k for LeBron’s High School worn Kobe’s and $110k for Stephen Curry’s Photo-matched Nikes, provided further evidence of concrete and growing interest in the category, though it bears noting that these both came from the same buyer. Still, the non Jordan six figure interest provides momentum to the category entering 2022.
  • Collectible appeal of the player, domestically and abroad. Luka has quickly risen to become one of the most collectible players in basketball. The $4.6 million sale of his 1 of 1 Logoman card is the second most expensive basketball card ever sold, putting him in esteemed air at a young age. For the most recent quarter, his jersey was the sixth highest selling in the NBA. Population reports for his base (18k PSA 10s) and silver Prizm cards indicate how widely he’s been collected over the past few years, and though those values have faltered, his high-end cards continue to appreciate. His National Treasures Rookie Patch Autograph cards, numbered to 99, consistently garner sales in the low-to-mid six figures. That being the case, those bullish on the opportunity for key game worn memorabilia, significantly more rare in quantity, to close the gap to card values would see opportunity for that thesis to play out here. It’s additionally worth noting that with the Slovenian player beginning his career playing professionally at Real Madrid in Spain, he commands adoration of an international fanbase (particularly in Europe) that may not be as strong for other players. This incrementally strengthens the potential breadth of long term demand relative to the already growing international NBA audience.

Bear Case

  • Track record of game-worn sneaker strength is short. Prior to the momentum seen at the end of 2021, the track record of game worn sneaker strength outside of Michael Jordan was fairly limited. Rookie sneakers of Kobe Bryant - extremely similar to the pairs that garnered  six figures at Heritage - had sales of $24,000 and $26,400 at Goldin in May 2021 and December 2020 respectively, not to mention $10,367 at Grey Flannel in June. Really, it’s in that low-to-mid ten thousands range that game worn sales have typically clustered in recent years. Between Goldin, Heritage, SCP, and Grey Flannel, only approximately 20 sneakers have ever sold above the valuation here, and the only ones that have were Jordan game-worns, Kobe game-worns, and LeBron game-worns. In fact, just three have been non-Jordan sneakers. In terms of Luka, the most relevant public sale was for a pair of rookie sneakers (Hyperdunks) photo-matched to three games, dating later than the pair here (March vs. January). They sold at Goldin for $28,800 in May. That was up just slightly from the sale of the same pair at SCP Auctions in August of 2020 for $26,896. Again, the end of 2021 sales may have reset the market significantly higher relative to May, but a bearish or even cautious investor may prefer to see further evidence of that momentum sustained into 2022 to ensure that activity was not an outlier or blip. The game-worn sneaker category has also been tremendously challenged to date in fractional. As of 1/27, the average ROI of game-worn sneakers on Collectable is -22.32%, with four of seven offerings down more than 30%. It may then suit even a lukewarm-to-bullish investor to await secondary market activity before initiating a position.
  • Not a particularly notable sneaker model. The sneaker model here is the Nike PG 2.5. PG stands for Paul George - it's the signature sneaker of a player whose popularity and relevance has somewhat waned in recent years. The model is perhaps most notable for being the sneaker destroyed by Zion Williamson’s superhuman foot at Duke. Luka was a hotly-pursued sneaker free agent during his rookie year before ultimately choosing Jordan Brand, and he wore a number of different models from different brands throughout the season. While the rookie-worn status will remain additive to value, it’s possible that other, more notable sneakers will push PG 2.5s in an unspectacular colorway further down the stack in terms of desirability. Possibilities may include the debut of his signature sneaker, key Finals-worn sneakers, and Kobe silhouettes worn during his rookie season, among others. 
  • Significant time horizon risk. As mentioned above, Luka has already become highly collectible, and that demand is reflected in the values for his assets. His age serves as both a source of upside…and also a tremendous risk. With his high-end cards valued the way they are, and with these sneakers valued at $82,000, the expectation is that he will be a player that wins multiple MVP awards and contends for NBA Championships with regularity. Should he approach those heights, there’s upside for his assets through growth alongside and potentially above the market, but at these levels, many unaccomplished achievements have been pulled forward into his valuations. Injury risk and organizational risk (can the Mavs shape a team around Luka to contend) are significant factors that may constrain or even destroy value in the years ahead. Promising though Luka may be, such is the case with any young star with high expectations. Patrick Mahomes may be an interesting cross-sport parallel, though his accomplishments are already more significant. 

1969 Oakland A’s Reggie Jackson Photomatched Jersey

2/2 @ 2:30PM ET

Valuation: $157,750

Read the Pro analysis here.


1984 Macworld #1 (Signed by Jobs & Woz)

2/2 @ 12:00PM ET

Valuation: $225,000

Read the Pro analysis here.


Piemonte Collection

2/2 @ 12:00PM ET

Valuation: $154,000

Read the Pro analysis here.

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