2 min read

Topps scores MLB NFT deal (I was wrong about $MUDS)

Topps scores MLB NFT deal (I was wrong about $MUDS)

Topps x MLB x WAX is a home run, imho.

So, the speculations had truth... Topps has just announced partnering with the WAX blockchain to release its first official Major League Baseball (MLB) non-fungible tokens (NFTs). Read about it here.

Given this recent development, I will admit my previous skepticism in this speculation wasn't exactly justified. But, the good news is, it's NOT too late to make a move... it's still the early innings 😉 (and I ain't stubborn).

As I mentioned in my previous letter, the valuation of Topps appears to be fair; but let's take a little deeper dive.

Based on the above, it's fair to expect Topps to carry a 2.5x revenue multiple, giving us a price per share of $15.00 – which at it's current price of $11.50, presents an immediate 30% upside.

This is, of course, a very basic/high-level calculation, but the real bet here is on the NFTs (or Digital S&E).

Dapper Labs, the company behind NBA Top Shots, is reportedly being valued at $2.5 billion.

NBA Top Shot has done nearly $500 million in sales with more than 800,000 accounts — 338,000 of which currently hold a NFT.

Dapper Labs (and NBA) earns an undisclosed amount each time an NFT is traded (on the blockchain) in the resale market – which can prove to be very lucrative for licensees, like Topps and Dapper Labs, if this is indeed the future.

I am nearly certain that Dapper Labs has a ludicrous valuation attached to it. And with that assumption, I am now willing to take a position in Topps.

I'm in Topps warrants ($MUDSW)

The warrants for Topps ($MUDSW) is currently trading with a 5x leverage ratio. If this deal/merger doesn't happen this can be worthless, but I'm willing to take that risk on a Definitive Agreement and with a smaller position in my portfolio.

If NFTs prove to be nothing but hype, I'll have warrants in a legacy card company (at a fair valuation) ...not the worst case 🤷.


Disclaimer: All material presented in this newsletter is not to be regarded as investment advice, but for general informational purposes only. Day trading does involve risk, so caution must always be utilized. We cannot guarantee profits or freedom from loss. You assume the entire cost and risk of any trading you choose to undertake. You are solely responsible for making your own investment decisions. Owners of this newsletter, its representatives, its principals, its moderators, and its members, are NOT registered as securities broker-dealers or investment advisors either with the U.S. Securities and Exchange Commission or with any securities regulatory authority. We recommend consulting with a registered investment advisor, broker-dealer, and/or financial advisor. If you choose to invest with or without seeking advice from such an advisor or entity, then any consequences resulting from your investments are your sole responsibility. Reading and using this newsletter or using our content on the web/server, you are indicating your consent and agreement to our disclaimer.