⚽ ’58 ALIFABOLAGET PELÉ ROOKIE CARD

The most coveted football card in existence

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What is the 1958 ALIFABOLAGET PELÉ ROOKIE CARD

The first thing to know about the Pelé rookie card is that no one really agrees what his rookie card was. There’s quite a lot of debate about it, actually.

Rally IPO’d another of his rookie cards in December, and it funded out almost immediately:

The second thing to know about this card is that it’s very very rare. There are only 51 in the PSA database. Only five are graded PSA 9, as this one is.

Pelé’s cultural relevance

It’s difficult to overstate how important Pelé was (and continues to be) to football (soccer to all you Americans):

  • Named joint player of the century by FIFA in 2000.

  • Named athlete of the century by the International Olympic Committee.

  • Time magazine 100 most influential people of the 20th century. Only two other athletes, Muhammad Ali and Jackie Robinson, made the list.

  • Became (and remains) the youngest player to win the World Cup in 1958.

  • The only player to win the World Cup three times.

  • Scored more than 1,200 goals, a record unlikely to ever be broken.

  • Scored 0.93 goals per game, which is superior to current greats Messi (0.80) and Ronaldo (0.73) and other Greatest of the Century player, Diego Maradona (0.52).

Treat yourself to ten of his best goals.

Pelé continues to be relevant today, and he sees a spike every World Cup year. It’s worth noting the trend line is negative, though, as you’d expect for a player whose fanbase is getting older.

He’s also more relevant than Diego Maradona, who played more recently .

Pelé is the greatest player of all time in the world’s most popular sport. The challenge to pinning down his investability is the lack of American interest in football. More on that below when discussing comps.

Asset valuation

Recent sales

The most recent sale of this card itself was Rally’s purchase at auction for $288k last autumn. Prior to that, a PSA 9 sold for $57k in 2018.

The card is scarce, so we don’t have enough PSA 9 sales to conduct a full analysis.

However, the price relationship between different grades of this card are quite consistent, so we can infer the value of a PSA 9 card at any given time based on recent sales of PSA 8.5, 8.0, 7.0 and so on. For example, a PSA 9 is worth roughly 2.63x what a PSA 8 is worth, and so on.

The data is still messier than we’d like, but we’re getting somewhere now.

Mean inferred value for these six recent sales is $415k.

Comparable Assets

Because this card is so scarce, and because there are so few iconic footballers to compare Pelé to, I’ve found it useful to compare him to other great sportsmen of his era:

  • Mickey Mantle (Baseball)

  • Bill Russell (Basketball)

  • Gordie Howe(Hockey)

  • Jim Brown (American Football)

As you can see, each gentleman is in the same ballpark in terms of cultural relevance with Pelé slightly ahead of Bill Russell.

Let’s have a look at PSA 9 rookie card values for each:

Mickey Mantle - $2.9m

Bill Russell - $150k

Gordie Howe - $47k

Jim Brown - $275k

Pelé - $315k

You can (and I would) argue 1952 Mantle is a bad comp because it’s so iconic. So here are a few other players widely considered to be top five for the era:

Ted Williams - $200k

Willie Mays - $650k

Jackie Robinson - $550k

You could also argue the 1979 Wayne Gretzky PSA 10 rookie card is a better comp than Gordie Howe’s PSA 9, as Gretzky is better-known than Howe and achieves similar relevance scores to Pelé in Google search. Further, the card populations are similar (2 for Gretzky and 5 for Pelé). The Gretzky went for $1.3m recently.

Pelé in at $315k from Rally falls well within these comps and is probably undervalued a bit.

Category and subcategory performance on Rally

The memorabilia category in Rally has returned > 250% ARR over the last twelve months.

Neither of the football cards to IPO (Messi and the other Pelé) has seen a trading window yet, but here are the ARR figures for other sports cards subcategories:

NFL: 417%

NBA: 266%

MLB: 70%

And we see strong growth from the universe of grades for this card over the last couple years.

Outlook + future catalysts

If you invest in Pelé’s rookie, you’re making a bet on a couple larger macro shifts:

  1. Increased interest in football (soccer) in the world’s leading sports card market - the US

  2. Increased interest in sports cards in the rest of the world

Viewership of the MLS in American has shown strong mid-single digit growth over the last decade or so, but it dipped in 2019.

A typical NFL game gets perhaps 10m viewer, MLB around 2.5m, NBA 1.9m, and NHL 2.15m.

It’s not clear when RallyRd will expand into European markets, if at all, so it’s more difficult to predict the second macro factor. It’s safe to say sports cards are still very much an American (and Canadian) thing.

A couple smaller catalysts on the horizon for Pelé’s rookie card:

  • The 2022 World Cup - interest in Pelé spikes every four years.

  • Pelé is 80 years old and, sadly, won’t live forever.

Maradona’s death in November 2020 attracted worldwide interest, and we can expect more of the same for Pelé when he passes.

Platform-specific notes

While the market cap for Pelé’s rookie card is in the 90th percentile at $315k, the share price is only in the 30th percentile at $10. Rally is pricing shares lower than usual, which typically indicates a higher first trading window bump.

ROI for memorabilia assets through the first trading window based on share price:

  • $10 or less: 66% ROI

  • More than $10: 34% ROI

Perhaps worth bearing in mind.

Verdict

I expect Pele’s rookie card to be a solid performer in a balanced portfolio:

  • Cultural relevance is high though slightly declining

  • Pelé appears to be undervalued relative to other sporting greats from his era

  • Several positive catalysts in the future without any observable negative ones

  • Platform-specific factors are positive

The final factor I’d consider is a different type of scarcity. If you’re an investor who wants to put a lot of money into a football card, this is really the *only* six-figure option you’ve got.

The primary risk with this card is a darth of comparable data, in my view. The PSA 9 version of this card is so thinly traded that I’ve had to use some roundabout valuation techniques. I could be wildly wrong!

This one is a 4/5 buy for me.

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Disclaimer 1: I plan to buy shares of this asset.

Disclaimer 2: Nothing in this email is intended to serve as financial or legal advice. Do your own research, you lazy rascals.