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Tomorrow at 12 PM EST, Otis will IPO 'Trainer Series', which consists of 5 pairs of Nike Air Max Grails. The financials:
We caught up with our friend Dylan Dittrich, Altanite and author of Sneakonomic Growth, for insight on the drop.
Among fractional alternative asset marketplaces, Otis has embraced a differentiated role in offering rare deadstock sneakers as an asset class. Each of these sneakers would generally be out of reach for most consumers, but their market values individually often fall short of what would typically be considered a substantial fractional offering, with a few exceptions. As such, Otis curates collections of multiple pairs, all sharing a similar theme, model, or collaborator.
The latest drop, dubbed the 'Trainer Series,' centers on the Nike Air Max series, and highlights some of the most sought after, memorable pairs in existence. The Air Max 1 is one of the most iconic runners of all time and a Tinker Hatfield gem. Many Air Max models that followed boast similar stature, particularly the Air Max 90, Air Max 95, and Air Max 97.
When considering sneaker collections for fractional ownership, you’ll notice that composition can skew in a couple directions. An offering may be composed of a well-balanced, diversified collection of similarly priced assets (see recent 'Air Jordan “Exclusives”' collection). Alternatively, one or more truly elevated assets may anchor the collection, with lower value assets rounding it out (see the recent Nike X Travis Scott collection). This Trainer Series definitively falls into the latter category.
Let’s take a deeper look at the five pairs in the collection to help assess the worthiness of the anchor and the appeal of the rest of the collection.
Pairs 1 & 2: The Parras, "Albert Hejin" and "AMS"
At the forefront of this collection is the “Albert Hejin” Air Max 1.
Only 24 pairs exist. That’s it. However, low supply numbers alone are no guarantee of long term appreciation. Scarcity certainly helps, but they must also be culturally significant.
In terms of artist collaborators in the sneaker world, few are more culturally significant than the Dutch artist, Parra. In fact, this entire collection could have easily been exclusively “Nike X Parra” collaborations. There are at least five models, including the “Albert Hejin” and the “AMS”, which readily command market values well into four figures. In fact, it was surprising not to find the Parra Patta “Cherrywood” Air Max 1 in this collection as its value is quite comparable to that of the “AMS”. It appears, however, that Otis is saving this gem for an upcoming Nike x Artist collection. The 2018 Friends & Family Air Max 1 release and the SB Dunk Low Friends & Family release from 2019 would be similarly at home in a Nike x Parra collection.
Parra is responsible for numerous Nike grails, in addition to a number of wildly popular slightly more attainable collaborations. Though at nearly $22,000, Albert Hejin’s status is something of Air Max folklore - not bad for a sneaker inspired by a grocery store. Setting the market on a truly rare, almost mythological piece like the Hejin has the potential to be a tastemaking win for Otis.
While not as fabled, the AMS is still a remarkably scarce release that was region specific, dropping only in Paris, London, Berlin, and Amsterdam. The sneaker has a credible track record of changing hands north of $3,000, suggesting there may be a somewhat sturdy floor beneath Otis’s higher $5,446 acquisition price. With the continued success of Parra collaborations and the dwindling number of pairs of the AMS in circulation, there is reason to believe there could be upside here.
Pair 3: KidRobot
Perhaps lesser known to the modern day sneaker collector than Parra, KidRobot is a globally renowned creator and dealer of limited edition toys and collectibles. Much like the AMS, only 250 pairs of the KidRobot AM1 were released back in 2005. The sneaker has a track record of sales reliably and consistently at the $2,500 level or higher. Otis acquired this pair for $2,992.
It is worth noting that there have been no reported sales on StockX since a 2017 trade (which was executed at that $2,500 level). Furthermore, there are only three live asks on the platform, none of which are in the size held by Otis. This tells us that pairs in circulation are few and far between, and therefore little supply exists to satiate any demand that should arise. As is often the case though, the demand side of the equation remains the greater source of uncertainty.
All of that being said, we can’t help but wonder what might have been if Otis had instead been able to locate and acquire the KidRobot “Hyperstrike” AM1 sample. With only 72 pairs released and a memorable hot-pink and red colorway, the sample has seen sales as high as $9,000 back in 2015, and would likely represent another anchor asset and a true grail for the savviest of sneaker enthusiasts.
Pair 4: Atmos Air Max 1 “Animal Pack”
While the original “Animal Pack” release is an iconic collaboration with an iconic collaborator in atmos and lead designer Hirofumi Kojima, this selection has the potential to underwhelm, or at least raise eyebrows.
The challenge is that the Animal Pack 2.0 released in 2018 and it’s almost the exact same sneaker. As sneaker enthusiasts know, “almost” can mean a difference of hundreds or thousands of dollars in market value. For instance, a Jordan 1 Mid in a “Chicago” colorway is “almost” the same as a Jordan 1 High OG “Chicago”. Only that “almost” is a lot less “almost” than the case here, and that’s reflected in the sales data that Otis shares.
While the drop in value isn’t precipitous, it exists. The OG sneaker will always be more culturally significant than the re-release, but once something is re-released in the sneaker world, there’s a greater likelihood that it “retroes” again. There are precedent cases where the value of a pair can withstand that, but in this case it remains to be seen.
This is especially evident given the apparent confusion in the marketplace. For instance, there is more than one listing for the original Air Max 1 Animal Pack release on StockX: one labeled atmos and one not. The one not labeled atmos has seen recent sales at similar levels to the data points that Otis shares, but the most recent sale was for just $299 at the end of September. It may be a misinformed seller, but that misinformation can derail a market.
Some other kicks that could have been considered include the Air Max 1 B atmos Viotech (especially the rarer, friends & family version), the Jordan branded atmos Air Max 1 “Elephant”, or even the Jordan x Max atmos Pack, which includes both the aforementioned Air Max 1 and a Safari Air Jordan 3. The incredibly scarce white colorway of the Air Max 1 Master could’ve also been anchor-worthy.
On the positive side, Otis acquired this asset for $1,199, a reasonable level versus historical sales and current estimated market value. Many releases since this one have found their aesthetic roots in this safari style legend - so whether you believe the OG Animal Pack is culturally significant enough to appreciate or not, the downside to the overall collection offering appears limited.
Pair 5: Air Max 97 MSCHF x INRI "Jesus Shoe"
Here’s where the collection strays from Air Max 1’s to introduce an Air Max 97. As detailed above, there are countless other worthy Air Max 1s out there, so the inclusion of an Air Max 97 feels a bit out of place. Though this is not just any Air Max 97, as it was inspired by Jesus walking on water and has “holy” water in its air bubble. It was created by MSCHF, who’s been dubbed the “Banksy of the Internet”. Otis has previously dropped a piece of MSCHF artwork in “Medical Bill”, where 3 real medical bills were turned into paintings and sold to erase $73K worth of 3 individuals’ medical debt, serving as a commentary on the US healthcare system.
While this shoe boasts the highest or second highest average sale price of any Air Max 97 on StockX (depending on whether you count the Sean Witherspoon 1/97), its market value has been somewhat volatile since the late 2019 release. It’s also the most recently released sneaker in the collection by thirteen years and as a result trades with more frequency than its collection counterparts. Importantly, the number of active asks for this sneaker are multiples that of the others. In the short term, its supply is greater than that of the other models, particularly because this sneaker was released in an era where the resale marketplace and the concept of sneakers as an asset is more prevalent than ever.
Of the non-Hejin pairs, this feels like the “Hail Mary” for an outsized outcome. There is of course no guarantee that such an outcome will occur and it would take time to come to pass, but with other assets in the collection offering the benefit of history and longer track records, this sneaker presents an interesting albeit risky opportunity. There are active asks for the sneaker below the $1,800 price Otis paid, though not in the size 9. The last two size 9 sales on StockX were at $1,412 and $1,503. This one may require a lot of patience and a little... faith.
Otis has once again delivered fractional market participants an opportunity to participate in the ownership of an undeniably well-curated and truly rare set of sneakers. Each grail commands a special place in Air Max history, but will they command a special place in your portfolio?
The 'Trainer Series' drops tomorrow at 12 PM EST on Otis.
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Disclaimer: The author is not affiliated with Otis or any other entity involved in this offering. You understand that by reading Altan Insights, you are not receiving financial advice. No content published here constitutes a recommendation that any particular security, transaction, or investment strategy is suitable for any specific person. You further understand that the author(s) are not advising you personally concerning the nature, potential, value or suitability of any particular security, transaction, or investment strategy. You alone are solely responsible for determining whether an investment, security or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal financial situation. Please speak with a financial advisor to understand if the risks inherent in trading are appropriate for you. Trade at your own risk.
