Bull Case Bear Case: 1958 Americana Ltd. Pelé Rookie Card

Welcome to the latest 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!

Collectable

1958 Americana Ltda Pelé Rookie Card

4/15 @ 2:30 PM ET

Valuation: $119,250

‍Bull Case

• It's Pelé. There is no player in the storied history of soccer that carries the reputation and lore of Edson Arantes do Nascimento, better known as Pelé. More specifically, on the international stage, no one has ever matched the career and prowess of Pelé. From being the youngest to ever win a World Cup title, to holding the record for World Cup assists, Pelé helped guide his homeland of Brazil to three World Cup victories in a 12 year span. In his first ever World Cup, Pelé pumped in a hat-trick in the semi-final and then added two more goals in the final game. He is one of only four players to have scored a goal in four different World Cup tournaments and for an athlete that never played for a football club in Europe, his brand has managed to remain relevant even to this day. There are some players that seem untouchable in sports and they have an established legacy that has cemented their place as a blue-chip within the hobby. In baseball, there is Mickey Mantle and Babe Ruth while in boxing you have Muhammad Ali and hockey has Wayne Gretzky. Pelé is on anyone's Mount Rushmore of soccer and there is nothing that could seemingly remove his name from the history books.

• The 2022 World Cup. In the fourth quarter of 2022, billions of people around the world will turn their attention toward the World Cup in Qatar. While a Super Bowl might attract 100 million viewers over the course of the sixty minute game, the World Cup attracts around 1 billion. Yes, that is billion with a 'B'. The average viewership of the World Cup is usually between 4-5x that of the Super Bowl and it is an event that garners attention around the world. For the hobby, this World Cup will separate itself from any previous sporting event we have seen. Sports cards and memorabilia prices are continuing to rise and the appreciation for soccer in particular is reaching new heights. With this being the first time that a surge within the hobby and the World Cup will collide, there is an energy around soccer cards that has since led to record-breaking sales. It is not often that a single sporting event can captivate an audience for a day such as the Super Bowl, but the World Cup has the opportunity to own almost an entire month. This year, there is an added bonus of the United States participating in the tournament which should help boost domestic ratings and provide an additional level of support for the soccer collectibles market.

• Rising soccer prices. In February, investors on Rally agreed to a $1.3 million buyout offer for a 1958 Alifabolaget Pelé rookie card. The sale marked the first million dollar price ever for a soccer card and established a new ceiling for a game that many collectors have long viewed as underrated within the hobby. Then over the past weekend, Goldin sold a 2014 Panini Prizm World Cup Gold Lionel Messi card for $522,000. The sale is not only the most expensive price ever paid for a Messi, but it also marks the highest sale price ever for a modern soccer card and is the first half-million dollar sale for a piece of modern fútbol cardboard. The overall Pelé market has also been strong, as fair market values for his 1958 Alifabolaget rookie card have increased by 13% - 48% over the last year depending on the grade.

Bear Case

• Lack of performance and sales. This will be the first Pelé IPO on Collectable and will ultimately be the first Pelé offering to begin trading on the platform. There is no questioning the greatest of Brazil's favorite soccer star but it is fair to wonder how a Pelé card will be received by investors on Collectable. Sales for this card are limited and there is only public auction data point over the last twelve months. In January, PWCC facilitated the private sale of a PSA 4 graded example for $148,400 and the auction house sold a PSA 1 graded copy for $28,800 in later that month. While the lack of sales is due to the limited graded population of this card, which is in part a bullish case, it does limit the potential catalyst via auction results. Additionally, the IPO does carry a slight premium to the price paid, as Collectable purchased this card for $107,000 while fees and expenses account for 10.21% of the IPO market cap.

• Soccer on Collectable's secondary market. While this will be the first Pelé IPO, it will not be the first soccer offering on Collectable. There are currently five soccer cards trading, two Messi's, two Ronaldo's, and a. basket of Erling Haaland rookies. The Haaland rookie basket is up 90% overall since IPO and has climbed 65% over the last month, but the other four offerings are all trading negatively. The average return for soccer cards on Collectable is 3.1% but if you remove the Haaland basket, the average between the remaining four offerings is -18.63%. Both of the Messi cards are trading at least -25% below their IPO market caps and the two Ronaldo offerings are -2.5% and -9%. The Haaland basket does provide some level of reprieve but with 80% of the soccer market currently in the red, the track record of performance for the sport as not been stellar to date.

• Will the catalyst carry all cards? One important factor to follow as money flows into soccer cards heading into the 2022 World Cup is whether that money is moving into just modern superstars. Although the World Cup will be without Haaland, the event will be loaded with modern talent including Messi, Ronaldo, and Kylian Mbappe. While a rising tide might lift all boats, the World Cup is a month-long event that will take place in the heart of the NFL season. The soccer market is globally recognized but within the United States, soccer still lags and although the World Cup does provide a temporary catalyst, the window has always been closed quickly at the conclusion of the tournament. This offers a short-term opportunity for cards to collect value quickly, and although Pelé is an established name, the majority of money could seek active players like Messi or even a US-based talent like Christian Pulisic.
  

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