We are only at the beginning of this market boom....

[hermanotarjeta]

Originally Posted by pewe

$500MM EV was pennies on the dollar?

Haha, yeah, it’s like fanatics told its investors they would generate 50 billion in revenue annually based on the 150 million people who would be collecting baseball cards in the future!

[GlenSepper]

Originally Posted by Triple B

They also bought Topps for pennies on the dollar.

Based on what, exactly?

(sorry, question already asked, interested to see reply)

[JoshMN]

Originally Posted by GlenSepper

Based on what, exactly?

(sorry, question already asked, interested to see reply)

Perhaps 500 MM looks like pennies on the dollar compared to the 1.3 billion USD valuation of Topps from the SPAC deal that fell through in 2020. But that deal did not actually go through so…

[GlenSepper]

Originally Posted by JoshMN

Perhaps 500 MM looks like pennies on the dollar compared to the 1.3 billion USD valuation of Topps from the SPAC deal that fell through in 2020. But that deal did not actually go through so…

And that was for 100% of the company, correct?

[splitrockgamer]

Originally Posted by JoshMN

Perhaps 500 MM looks like pennies on the dollar compared to the 1.3 billion USD valuation of Topps from the SPAC deal that fell through in 2020. But that deal did not actually go through so…

Using fake Ebay sales for comps, guess it works at every level of the hobby.

[hermanotarjeta]

Originally Posted by splitrockgamer

Using fake Ebay sales for comps, guess it works at every level of the hobby.

Yes, and bowman and topps chrome wax prices as comps as well - make a box for $50, sell it to retailers for $800.

[80s Kid]

Fanatics basically created a monopoly at a time when money was cheap. M&A is a common thing at the end of bull markets as large companies look for avenues to grow.

They’ll print money fine while all the old collectors complain about prices and changes.

[JoshMN]

Originally Posted by GlenSepper

And that was for 100% of the company, correct?

Yes, 1.3 billion was total valuation for Topps according to the press. And that was with the MLB license through 2025.

Lots of ways for doing a valuation of a company, but people often cite value as some multiple of the annual revenue (the multiple itself would vary by industry).

Topps' 2020 revenue was 567 MM USD, so the acquisition multiple would be less than 1 (way less than 1 if you look at expected 2021 final numbers). So by that metric, the pennies on the dollar view might be valid. The lack of the MLB license after 2025 could be the reason for that discount. Fanatics was clearly negotiating from a position of strength after they picked up the license.

[pewe]

Originally Posted by JoshMN

Yes, 1.3 billion was total valuation for Topps according to the press. And that was with the MLB license through 2025.

Lots of ways for doing a valuation of a company, but people often cite value as some multiple of the annual revenue (the multiple itself would vary by industry).

Topps' 2020 revenue was 567 MM USD, so the acquisition multiple would be less than 1 (way less than 1 if you look at expected 2021 final numbers). So by that metric, the pennies on the dollar view might be valid. The lack of the MLB license after 2025 could be the reason for that discount. Fanatics was clearly negotiating from a position of strength after they picked up the license.

Topps' trading card business was <2/3 of its revenue. And buyers in the SPAC likely (should have) priced that business at a discount relative to the rest of the business given its larger exposure to economic cycles and cyclicality.

Now... are SPAC buyers particularly rational in the first place? And was the $1.3B valuation real? Well... I'll let the performance of SPACs on the open market tell that story.

$500MM may have been quite fair, and even more than a non-strategic buyer (i.e., PE) would have paid pre-Fanatics gaining access to the league license.

[GlenSepper]

Originally Posted by JoshMN

Yes, 1.3 billion was total valuation for Topps according to the press. And that was with the MLB license through 2025.

Lots of ways for doing a valuation of a company, but people often cite value as some multiple of the annual revenue (the multiple itself would vary by industry).

Topps' 2020 revenue was 567 MM USD, so the acquisition multiple would be less than 1 (way less than 1 if you look at expected 2021 final numbers). So by that metric, the pennies on the dollar view might be valid. The lack of the MLB license after 2025 could be the reason for that discount. Fanatics was clearly negotiating from a position of strength after they picked up the license.

We're talking different things. Fanatics didn't buy 100% of Topps.

[GlenSepper]

Originally Posted by pewe

Topps' trading card business was <2/3 of its revenue. And buyers in the SPAC likely (should have) priced that business at a discount relative to the rest of the business given its larger exposure to economic cycles and cyclicality.

Now... are SPAC buyers particularly rational in the first place? And was the $1.3B valuation real? Well... I'll let the performance of SPACs on the open market tell that story.

$500MM may have been quite fair, and even more than a non-strategic buyer (i.e., PE) would have paid pre-Fanatics gaining access to the league license.

Agreed, it was hardly "pennies on the dollar".

[JoshMN]

Originally Posted by GlenSepper

We're talking different things. Fanatics didn't buy 100% of Topps.

Fair enough, but the Bazooka/candy part of Topps had 250 MM revenue in 2021 compared to 760 MM estimated total. So the part that remained Topps was still ~500 MM revenue at the time of acquisition.

Either way, some folks on the internet without full information are not going to give an accurate assessment about the deal and whether or not Fanatics paid appropriate value.

[GlenSepper]

Originally Posted by JoshMN

Fair enough, but the Bazooka/candy part of Topps had 250 MM revenue in 2021 compared to 760 MM estimated total. So the part that remained Topps was still ~500 MM revenue at the time of acquisition.

Either way, some folks on the internet without full information are not going to give an accurate assessment about the deal and whether or not Fanatics paid appropriate value.

I agree with your post, however, the poster who made the statement Fanatics paid "pennies on the dollar" is clearly misinformed.

[oldgoldy97]

Originally Posted by GlenSepper

Agreed, it was hardly "pennies on the dollar".

Do 99 pennies still qualify?

[jduds]

Originally Posted by GlenSepper

I agree with your post, however, the poster who made the statement Fanatics paid "pennies on the dollar" is clearly misinformed.

Certainly not "pennies on the dollar" but widely considered a win for Fanatics and a huge loss for the Topps team in the financial papers.

[JoshMN]

Originally Posted by oldgoldy97

Do 99 pennies still qualify?

Haha. If we are going to argue about applying the phrase "pennies on the dollar" to this situation then we absolutely need to answer this question.

[OneSickDegen]

Originally Posted by hermanotarjeta

make a box for $5, sell it to retailers for many bajillion $$$.

FYP

[GlenSepper]

Originally Posted by jduds

Certainly not "pennies on the dollar" but widely considered a win for Fanatics and a huge loss for the Topps team in the financial papers.

Everyone has an opinion. Any links to the analysis showing it as a "huge loss" for Tornante?

[jduds]

Originally Posted by GlenSepper

Everyone has an opinion. Any links to the analysis showing it as a "huge loss" for Tornante?

Sure. I meant it more as an an L rather than actual dollar amounts, but while not a disaster, it was a clear loss. The important bits, but full link below.
"So, the SPAC merger valued the company at about 2.3 times its revenue and 13 times EBITDA." and
"At $500 million, Fanatics paid about 1.4 times revenue and 5.7 times EBITDA, far less than the multiples in the SPAC deal."

That's all accounting for what was not included in the deal. There is some quibbling to be made about the figures, but not enough to change the results really.

https://www.jaxdailyrecord.com/artic...in-in-topps-co