As sports card and memorabilia prices skyrocketed in 2020, many items considered expensive suddenly became unattainable. In September 2020, the sports fractional platform Collectable debuted with a 1953 Topps Mickey Mantle PSA 10.
Collectable fractionalized the iconic card into 40,000 shares at $25 per share. For just $25, sports card investors could say they owned a piece – however small – of a ’53 Topps Mantle in Gem Mint condition.
The card was valued at $2.5 million in its Initial Public Offering (IPO), with $1 million in shares going to investors and the other $1.5 million retained equity for the consigner. By July 2021, shareholders accepted a buyout offer of $3.1 million, returning investors 24% on their initial investment.
Collectable was able to ride the massive wave in the sports collectible market after the pandemic. More than 13,000 investors have invested in items they once could only dream of owning two years since the Mantle debut. Fractional platforms allow the everyday collector an opportunity to realize gains from some of the rarest sports items in existence, typically for $5 or $10 per share (the Mantle was an exception).
But as with any wave, the tide has turned. Two years into running the lone platform solely dedicated to sports memorabilia, Collectable CEO Ezra Levine has seen some assets take steep dives after they’ve entered Collectable’s daily trading platform.
“We’ve seen the great, the bad, the painful,” Levine says.” Every market over the last year, there hasn’t really been a safe haven. Our Collectable 25 Index is up 12% since inception.”
Levine is proud of the work Collectable has done in the sports memorabilia future, beyond the huge task of running the platform. He notes the Mint Collective and Cocktails & Cards events they organized to get collectors and industry leaders together. Both were well received.
But Levine has also heard the critics. By our account, there are 215 items trading on Collectable. Of those, 28 have yielded positive returns since IPO. The rest of the assets are either flat or have generated negative returns, indicating they may have been overvalued. In our most recent survey, 91assets have lost half or more of their value from the IPO. According to Collectable’s Index, its platform has a weighted -23.6% return, including all buyouts since the platform’s inception.
“Anytime you do something different that’s never been done before, you’re going to have critics,” Levine says. “I appreciate the critics, I understand the criticism, but we’ve done everything with great integrity. It fuels us to build a better product.”
One of Collectable’s key takeaways from the past two years is to focus more on the “grails,” high-end, rare pieces of the most well known athletes.
A true grail on the Collectable platform – Wilt’s rookie uniform.
“There’s more risk in modern pieces,” Levine says when asked about some ultra-modern offerings on Collectable. “The things that are irreplaceable have done really well.”
As for the decline in share prices for so many items, Levine says Collectable set out to create a true marketplace for sports collectibles and hasn’t been immune from an overall slide in prices that began early this year. “When you look at markets today, they’ve all experienced a downturn,” Levine says. “We set out to create a marketplace just like MarketAxess, Nasdaq or the New York Stock Exchange. When you see how public markets have performed, ours is in line with them.”
According to Levine, there will be several announcements from Collectable in the coming months regarding new partnerships and sponsorships.
Ups and Downs
We dove into the assets that have been bought out for a profit and those currently trading on the platform that have seen the best returns. We also looked at some of the poorest performing assets.
Then, we also looked at some of the same results from Rally, a pioneering fractional market that was the first to trade sports collectibles. Initially known as Rally Road, the company also offers fractional investments in a wide variety of other items.
Top 5 Buyouts on Collectable (ascending order)
5) 2013 National Treasures Giannis Antetokounmpo RPA PSA 9 #’d 11/99 (78% return)
- This card was offered at a total market value of $112.5k.
- The buyout was for $200k.
4) 1980 Topps Bird, Dr. J., Magic Rookie Card PSA 10 (105% return)
- The card is one of 24 PSA Gem Mint 10s.
- It was offered at a total market value of $352k and exited at $720k.
3) 2017 Panini Flawless Green Patrick Mahomes RPA PSA 10 #’d 2/5 (117% return from IPO)
- A Gem Mint version of a card numbered to 5 makes this a unique example.
- The card was offered for $46k and approved for a buyout by shareholders at $100k.
2) 2015 Bowman Chrome Superfractor Rafael Devers AUTO BGS 9.5 1/1 (118% return from IPO)
- Devers quietly had another impressive season for the Red Sox that included a second straight appearance in the All-Star Game.
- One collector thought highly enough of him to buy this Superfractor for $78.5k, more than twice its IPO price of $36k.
1) 1955 Topps Sandy Koufax RC PSA 8.5 (177% return from IPO)
- The highest return from a buyout on Collectable came from this Sandy Koufax card.
- As we wrote about a month ago, high grade Koufax rookie cards are difficult to find, with only about 3.7 of all of them grading an 8 or higher.
- This card was sold at a market cap of $36k and was bought out for $100k.
Top 5 assets with positive returns trading on Collectable (Descending order)
1) 2018 Panini Prizm Gold Josh Allen RC BGS 9.5 #’d 10/10 (200% return)
- This card was offered to investors at $30k in June 2021.
- Its current market value on Collectable is $90k.
- A PSA 10 version of the card sold for $228k in February 2022.
2) Tiger Woods Titleist Scotty Cameron Te I3 Tournament Used Putter (199% return)
- The putter is believed to have been used by Woods in the late 1990s, including the 1998 U.S. Open (in which Woods finished T-18) and the 1998 Bell South Classic, which Woods won.
- The putter had an initial market valuation of $210k in March 2021. Its current valuation on Collectable is $630k.
3) 1952 Topps Mickey Mantle PSA 8 (140% return)
- This card debuted at a $485k in January 2021 on the platform.
- Mantle has proven to be one of the most profitable trading card investments in the past three years.
- The card is currently trading at a market valuation of $1.16 million.
4) Wilt Chamberlain 1959-60 Game Worn Rookie Uniform (120% return)
- This uniform was offered to investors at a market value of $1.275 million.
- It appears that the uniform was undervalued. It is currently trading at a market cap of $2.8 million.
- In September 2022, Collectable shareholders rejected a $3 million buyout.
5) 1986 Fleer Michael Jordan RC PSA 10 (118% return)
- The Michael Jordan card to have IPO’d on Collectable for $100k, more than 1 1/2 years ago
- Recent comps have the card selling for between $180k – $210k
- The current market cap on Collectable is at $218k
Collectable’s 5 lowest performers to date (in descending order)
Keep in mind that there are nearly 100 items that have lost 50% or more in market value since IPO. In this section, we’ll highlight the five largest negative returns trading on Collectable.
1) 2004 Exquisite Dual Logoman LeBron James and Carmelo Anthony 1/1 BGS 9 (-85% return)
- IPO’d at $1.07 million
- Since trading opened 374 days ago this Logoman has generated a trading volume of $33.7k – about $90 a day.
- It currently sits at a market cap of $160.5k
2) 2015 Bowman Chrome Gleyber Torres Orange Refractor AUTO BGS 9.5 (-84% return)
- IPO’d at $20.7k
- Since trading opened 553 days ago this rookie card has generated a total trading volume of $4.4k, or about $8 a day.
- It currently sits at a market cap of $3.3k
3) 1980 Topps Bird, Dr. J, Magic, RC PSA 8 Basket (2x) (-82% return)
- IPO’d at $27.5k
- This card was part of the wave that overvalued certain premium cards. The PSA population report indicates there are more than 4,000 PSA 8s, including qualifiers
- This basket currently has a market cap of $4.8k
4) 1993 SP Derek Jeter RC BGS 9.5 Basket (2x) (-82% return)
- The basket of two rookie cards IPO’d at $100k.
- BGS and BVG cards have generally performed poorly on the Collectable marketplace. This is the fourth Beckett graded item in Collectable’s Bottom 6
- The Jeter basket of rookie cards has a current market value of $19k.
5). 2003 Fleer Crystal Trio LeBron, Wade, Melo RC PSA 10 (-80% return)
- This card IPO’d for a whopping $358k.
- Only 5 cards are graded 10 out of 979 PSA submissions.
- It currently sits at a market cap of $71.6k.
6) 2018 Panini Contenders Michael Porter Jr. Championship Ticket AUTO RC 1/1 BGS 9 (-80% return)
- IPO’d at $30k
- This was a risky investment as Porter Jr. was riding off a momentous 2020-21 season. He was injured for the majority of the 2021-22 season with a serious back injury.
- It currently sits at a market cap of $6k
Rally is a fractional marketplace initially focused on sports cars, not cards. But Rally soon ventured into other assets. It has become the leading fractional marketplace for retail investors in the world. Its assets include original copies of the Declaration of Independence to meteorites from the moon.
Rally has also ventured heavily into sports cards and memorabilia. The platform has had some historic buyouts and also counts some of the most iconic sports cards among its inventory.
The Top 4 Buyouts on Rally (in ascending order)
4) 1951 Bowman Mickey Mantle SGC 7 (91% return from IPO)
- Mantle’s “true” rookie card, the ’51 Bowman isn’t as popular as the ’52 but has been gaining more respect as the hobby matures.
- It debuted on Rally for $34k and sold for $65k.
3) 1986 Fleer Michael Jordan RC PSA 10 (100% return from IPO)
- This card was bought out in June 2020, just as card prices were beginning to reach a fever pitch.
- Rally offered this card for $40k and exited at $80k–not a bad deal considering PSA 10 Jordans are currently selling for about $150k-$175k.
- It’s one case in which investors should have hung on for a few more months when the card was trading for above $500k.
2) 1958 Editora Aquarela Pele Rookie (134% return from IPO)
- The card was offered for $26.5k and exited for $62k in February 2021.
1) 1958 Alifabolaget Pele Rookie (323% return from IPO)
- This was a huge buyout on the Rally platform. It was the first soccer card to sell for more than $1 million when a buyout was approved in February 2022.
- Rally investors were able to get into shares of this card when it was valued at $315k.
- It was sold for $1.3 million.
There have also been some significant gains on assets that haven’t been bought out. We noticed a trend on the Rally platform. While there are some game-used items that have provided positive returns, the overwhelming majority of assets with positive gains are sports cards.
The Top 5 assets with positive returns trading on Rally (in descending order)
1) 1956 Topps Mickey Mantle Gray Back PSA 8
- This card has offered investors an incredible 525% ROI.
- It isn’t necessarily rare but was IPO’d in January 2020 at $1 per share, with a total of 10,000 shares.
- This Mantle has enjoyed the entirety of the card boom and it’s now trading at $6.25 per share.
2) T206 Honus Wagner SGC Authentic
- Initial shares could be bought for $52.
- Shares are now trading at $180.
- The card has returned 246% since its IPO.
3) 1952 Topps Mickey Mantle Rookie Card SGC 7
- This card is currently trading at 225% above IPO price.
- It initially traded for $132 per share. Rally then offered a 10:1 stock split.
- Each stock is now trading for about $43.
4) 1933 Goudey Babe Ruth PSA 8
- Offered in February 2020 with a market cap of $77k
- The market cap has since risen to $230k
- Investors at IPO have seen the value of the card rise by 198%
5) 1957 Topps Mickey Mantle PSA 8
- The card was offered at IPO for $8k
- IPO investors have seen the value increase by 135%
- This is the third Mantle in Rally’s top 5 currently traded cards
While Rally has seen some of its assets provide great returns, it has a fair share of items that are trading well below its IPO valuations. By our most recent analysis, Rally has 29 sports cards and memorabilia pieces that have lost 50% or more of their value from IPO.
One explanation is that platforms like Rally need to sustain their business model with fees from buying and selling on its secondary market. To do that, Rally must source more items, and over time the demand and scarcity for these items are not as high. Modern and ultramodern cards have taken a huge hit on the platform.
A quick look at Rally’s top 4 buyouts and top 5 assets on its market shows that eight of the nine are pre-1960 cards. The lone exception is the 1986 Fleer Jordan Rookie in PSA 10. Rally also debuted many of its cards and memorabilia near the crest of the hobby wave.
Rally’s 6 Lowest Performers (Ascending Order)
1) 2020 Topps Baseball 1st Edition Complete Set (-72% return)
- Rally had an exclusive deal with Topps to receive 10 of 12 “1st Edition” 2020 Topps Baseball Series sets made.
- The 1st Edition sets contain rookie variations, each card has 1st Edition stamped on it in silver foil. Each set also comes in custom wooden boxes.
- The IPO value was for $100k, assuming a value of $10k for each set in Rally’s collection.
- The market cap currently sits at $28.5k.
2) 1950-51 Joe DiMaggio Game-Used Jersey Final Season (-66% return)
- DiMaggio jerseys are hard to come by but the returns are not reflected on Rally
- The jersey IPO’d for $450k. It’s currently sitting at a $151k market cap
3) 1972 Nike Prototype “Moon Shoe” (-65% return)
- The pair of shoes is one of the earliest of Nike’s prototypes.
- This is one of 12 waffle-soled shoes made by early Nike employee Geoff Hollister for the 1972 U.S. Olympic Trials.
- While the running shoes are certainly a part of sneaker and corporate history, it has been slow to catch on the Rally marketplace.
- The pair of shoes debuted with a market cap of $180k, and are currently trading at a market cap of $63k.
4) SI For Kids Naomi Osaka RC PSA 9 (-65% return)
- This is one of 15 PSA 9 copies. Initially sold when there was a PSA 9 population of 6.
- Osaka has four Grand Slam titles but has struggled since her 2021 victory at the Australian Open.
- Initially sold to the public at $13k, the value currently stands at $4.55k.
5) 1980 Muhammad Ali Sparring Gloves Inscribed to Sylvester Stallone (-63% return)
- Offered to the public for $75k.
- The gloves, which were used to train for Ali’s final fight, also offer a unique inscription to Stallone.
- Despite the provenance, the gloves currently sit at a $28k market cap.
6) Michael Jordan Debut Ticket Stub (-63% return)
- A debut unused ticket sold for $468k earlier in March 2022.
- This PSA 5 ticket debuted at a market cap of $160k. It is one of 2 PSA 5 stubs.
- The only higher graded version is a single PSA 6. There have been 23 MJ Debut Stubs graded by PSA.
- With changes in the overall market and the ticket stub market, this MJ stub sits at a $60k value.
The fractional marketplace is still developing. A lack of liquidity and a difficult marketplace due to macroeconomic forces have dealt them a blow that, if they can overcome, may reward their resiliency as the market matures. For users to continue investing, it’s also imperative that these marketplaces learn from their mistakes to provide the best sports items at proper pricing so that the collectibles market can offer investments that have consumer confidence.