Welcome to Sports Cards Insider. We use Moneyball tactics to discover undervalued, mispriced, and hidden gems in Fractional Investing.
Today is a deep dive into a Babe Ruth 1916 Sporting News PSA 7 that IPOs on Collectable Sunday 25th April at 6pm EST. We’ll also look briefly at the NFT they’re pairing with the drop.
What is the Babe Ruth 1916 Sporting News PSA 7?
This is Babe Ruth’s rookie card. It shows him pitching for the Red Sox before they converted him to an outfielder and traded him to the Yankees. The card itself comes in a couple variants — on with a blank back (this one) and one variant with advertising on the back. It’s exceptionally rare with only twenty total registered with PSA.
There are three total PSA 7s with only two blank back. One card is graded higher, at PSA 8.
This specific card has traded twice on the open markets.
In 2017, it sold for $600k at Robert Edward Auctions, and it fetched $82,250 a decade earlier.
According to the SEC filing his card is currently owned by Collectable’s parent company, Collectable Technologies, Inc. They were paid a 9% sourcing fee as part of the consignment ($140k cash, $175k equity).
It IPOs on Collectable 25th April for $3,690,00 with no retained equity (unless you count the 5% mentioned just above).
Add IPO to calendar
Cultural Relevance
Babe Ruth was arguably the best baseball player ever to play the game. He’s certainly the best two-way player – he was an outstanding pitcher before he moved to the outfield.
Over his 22 year career, he racked up a career .342 batting average, 714 home runs, 2,174 runs, 2,214 RBIs, and an obscene .690 slugging percentage.
His .690 slugging percentage, 1.164 OPS and 206 OPS+ are still records 86 years after his retirement.
The day of his 714th home run, the Babe went 4 for 4. Three home runs and a hit RBI. Total 6 RBIs in one game.
Had he not spent five years pitching with the Red Sox, he almost certainly would have hit another 200 home runs, eclipsing 900 total. That would still be a record.
And he was even better in the postseason. He had a career .744 slugging percentage across ten world series runs, and he won the ring seven times (three with the Red Sox and four with the Yankees).
In three games pitching in the post season, Ruth chalked up a 0.87 ERA across 31 innings, winning three games and losing none.
Ruth led the league in innumerable categories through his 22 years, including each of the following ten or more times:
- Wins above replacement (WAR)
- Offensive WAR
- WAR Position players
- On-base average
- Slugging %
- On-Base Plus Slugging
- Home Runs
- Walks
- Adjusted OPS+
- Adjusted Batting Runs
- Adjusted Batting Wins
- Offensive Win %
The man was a juggernaut.
He was elected as part of the first-five into the inaugural Hall of Fame class.
The World Series MVP Award is the Babe Ruth Award and Major League Baseball annually presents the Babe Ruth Home Run Award to MLB’s top home run hitter.
Points – 7/10
Inferred Value
This card is so scarce that valuing it is more art than science.
The last sale was a PSA 6 for $940k, and the most recent PSA 7 was in 2017 for $600k (this card, mentioned above). Since 2017, Ruth’s most popular cards have appreciated 230% to 440%, so our ballpartk is perhaps $2m to $3.2m.
Heritage has the other PSA 7 blank back at auction now, amazingly, and it’s currently up to $2.2m with a fortnight left. They’ve put a guide estimate at $4m:
In order to provide some helpful context, we’ll remind you of the globally-publicized sale of a Pop-Six example of a 1952 Topps Mickey Mantle card for $5.2 million in January of this year, a specimen also trailing just three superior representations. Is that world record poised to fall? It’s tough to bet against the Babe, who owns just about every hobby record on the memorabilia side of the ledger. And when we consider that this Ruth card is twice as rare as the 1952 Mantle at the second-place position of their respective PSA population rankings, the tug of critical thinking pulls us in the Babe’s direction.
Their argument is compelling, but it fails to note the overall downturn the hobby has experienced since January 2021. That said, most of Ruth’s cards have held up pretty well since then, with his three most-traded 1933 Goudey cards all ticking up:
Will that card hit $4m? Is this one worth $3.7m? Maybe? The latter depends on the former, and the former depends how many millionaires / billionaires decide they Must Have this Card. And that’s completely up to chance / Heritage’s client outreach team.
For what it’s worth, Only Alt values the card at $1.7m (off a high of $2.2m in March), and PSA values it at $1.25m.
Those are both too low based on the Heritage bidding activity already.
I’m going to give Heritage and Collectable the benefit of the doubt – I’m going to pick the top of my range at $3.2 and hope that I’m wrong (to the upside). More than perhaps any asset so far, this one is just worth whatever some rich guy is willing to pay for it.
Inferred Value: $3.2m.
Points 4/10
Category Strength
The sports cards category returned a 60% ROI in Q1 2021.
Points 10/10
Subcategory Strength
Baseball cards returned a 40% ROI in Q1 2021.
Points 7/10
Risk Profile
Baseball cards have returned an 111% standard deviation. Lower is better.
Points 1/10
Recent Growth Trend
As noted above, his cards have appreciated significantly over the last year or so.
Points 10/10
Growth Outlook and Future Catalysts
This completely depends on the industry as a whole. If you think the industry will continue to appreciate, especially at the very high end, this is a great bet on that.
Points 8/10
Asset Liquidity
This will have a roughly 90 day lockup period then will trade daily.
Points 8/10
Platform Risk
Collectable is moderately transparent
Points 7/10
Intangibles
Other than the 5% equity sourcing fee, there’s no retained equity on this one, which is really unusual for a Collectable asset of this caliber.
I also believe the cultural relevance score is a bit low (it compares him to modern juggernauts like X-Men), so I want to give a couple extra points here to make up for that.
From a personal point of view, I really like that it shows him pitching. Just my opinion, but I reckon he could have gone on to be one of the best pitchers of all time. What a man.
Points 10/10
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