With an obvious explosion of investments in collectibles companies over the last eight months, Trading Cards are clearly the Elephant in the Room (even before NFTs!). This article takes a deep dive into the most recent investment trends in the FanMerch market (worth roughly $450 billion annually).
Here are the investments this year so far –
(there is a Note at the very bottom of the article about this chart)
Early in 2021, a Michael Jordan rookie card sold for $215,000. Weeks later, the same card sold for $738,000 (243% up!), and now, it is worth even more than that. In May, Target stopped selling trading cards in its stores after four men accosted a customer in the parking lot, which then resulted in the customer pulling a gun. In following the collectible markets for more than 30 years, I have never seen anything like it (Beanie Babies was nothing against this).
18 out of 28 transactions were related to Trading Cards (that is 83% or $1.6 billion of the total $1.933 billion investments). And that number could have been bigger if Topps had gone public as planned at an anticipated $1.3 billion valuation this year. The only reason that the deal did not happen, is that an even bigger company, Fanatics (recently valued at $15-20 billion), managed to snag the MLB contract (a major surprise) and is now also entering the trading card market.
All of these auction records and investments feed on each other and on pundits such as the Verified Market Research Trading Card report that claimed this segment alone is going to be worth $100 billion in 5 years (which many in the media like this CNBC article from today quote as gospel. Here are the headlines –
We think that this market is about to peak and that it only represents about 1% of the total collectible market. There is a lot of money that has been made in this market this year, and there might be some more upside, but we believe the downside is looming much larger.