The debut of 2005 baseball eTopps IPOs has been met with a resounding thud on the eTopps message boards. Many are noting that baseball is the least successful eTopps series in holding price relative to IPO prices, and that people would be wise not to buy baseball cards at IPO. The strongest evidence is the performance of the last three baseball sets, with the 2004 set currently selling at an average of 52 percent below IPO prices, the 2003 set down 47 percent, and the 2002 set down an incredible 66 percent.

The numbers do not lie, so I will not argue that purchasers should not be selective in making decisions about buying eTopps cards, particularly baseball cards, at IPO. But I do see a number of reasons why 2005 baseball could be more successful than the last three sets.

• Improved CardTarget Market. The new trading post based CardTarget system for buying and selling eTopps cards clearly is an improvement for the secondary market with lower transaction fees and transactions occurring in minutes rather than after a day. Why does this encourage purchasing at IPO, though? First, the return needed to "break even" on an eTopps card bought at IPO is now lower with the lower transaction fees afforded by this system. A card purchased at $5.00 at IPO can now be sold for $5.35 (or less, with discounts for CT advanced service users) for the seller to break even, thus marginally reducing the risk for buying an eTopps card. Further, even if a card loses value after IPO (which most baseball cards have done in the last three years) the CardTarget Market provides a very effective tool for "dollar averaging down." By setting a buy price lower than the IPO price, one can lower their average cost and set sell prices for any duplicates. With the lower transaction fees, the spread between buy and sell prices should narrow. Finally, the faster transaction times will lead to more excitement for flippers when hot cards are issued at IPO as accumulators can quickly acquire and flippers quickly resell their cards



• Improved eTopps features. Since last year, eTopps has also improved the Trading Post and rationalized the value of rewards points to be worth about $1.25 each. The Trading Post affords another forum for IPO purchasers to exchange cards as many individuals that forego IPO purchases will seek these cards on the trading post. Thus, a new 2005 card may be a good bait for getting multiple earlier year cards. The $1.25 standard for rewards points also rationalizes the valuation of cards. An IPO purchaser could consider this a discount from the purchase price. One could consider that buying a $5.00 card is worth one-fifth of an eTopps rewards catalog point, or an effective discount of about $0.25. Now, the $5.35 break even point for selling the card via CardTarget Market can be considered a $5.10 break even point. For "gold level" CardTarget members who pay lower fees, the break even point for the $5.00 card would actually be less than $5.00 (about $4.90) if counting the value of rewards points. eTopps also promises improvements to its games, but I will wait to see before commenting.



• Lower print runs. Okay. I’ve read the message boards and seen the disappointment many have expressed that the print runs for the first week’s IPOs are too high. But in reality the maximum print runs reflect a significant lowering from 2004. This may reflect both the reduced holdbacks retained by eTopps for promotions and the catalog as well as the maturing necessitated by fifth-year player cards and second-year team cards. However, the 1,300 to 3,900 print runs for this week’s debut of 2005 baseball is notably lower than the 2,500 to 5,000 print runs for the debut of 2004. Besides, it would be self-destructive for eTopps to set restrictive maximum print run levels during the first week as eTopps takes the pulse of the market for IPOs. Consistently, in recent sets eTopps has reduced maximum print runs after the initial weeks of IPOs, and similar reductions can be expected for future 2005 baseball IPOs. Further, only one card in the entire 2004 set had a print run of less than 1,300 (Brian Giles at 1,267) so the Livan Hernandez and St. Louis Cardinals cards are guaranteed to have lower print runs than 99 percent of the 2004 set (though I would put similar odds that neither of these will be the short print of the 2005 set). I would expect most players and nearly all teams to have lower print runs than their predecessors, with median print runs closer to 2003 than 2002 or 2004 levels. I expect some print runs to be below 1,000.



• Washington Nationals. Yes, I’m admitting my Washington, D.C. bias here. But after 34 years without a baseball team in the Nation’s capital, the hunger for baseball items with the new team’s logo and players will make these cards sell more than if they said "Montreal Expos" on them, and likely will have strong potential for the local in-hand market. Hopefully the ridiculous name "Los Angeles Angels of Anaheim" will also become a novelty in a few years as the team adopts the Los Angeles name or reverts to Anaheim or California as its surname.



• Enjoyment of eTopps. Well, even if I haven’t convinced anyone with my first four reasons for why 2005 baseball IPOs may be at least modestly more successful than the past three years of baseball IPOs, one has to admit that it is more enjoyable to participate in all aspects of eTopps. Some participants may limit themselves to the secondary market or trading post, but I enjoy eTopps more for its multiple avenues of enjoyment and complexity. IPO purchases, CT purchases and sales, the trading post, the catalog, and even occasional peeks at what is offered for sale at eBay make for a well rounded eTopps experience.

The bottom line is that a wise purchaser should be selective because most eTopps cards, especially baseball cards, fall in price from IPO levels. But ignoring all IPO purchases is also overly simplistic. Do your research, develop purchasing strategies, stick to favorites, and occasionally take a risk on a card that might (but might not) rise in value from IPO. And read the IPO Insight columns that I and my colleagues will write over the next few months, but consider them only as one person’s perspective for you to consider. Hopefully we will offer some perspective you haven’t thought of, but also will provide some perspectives you will disagree with. That’s the fun and challenge of eTopps!

Finally, on to this week’s IPOs...

Adrian Beltre (2,600 @ $6.00)

The Mariners signed third-baseman Beltre after his superb 2004 season with the Dodgers during which he finished second to Barry Bonds in National League MVP voting. Beltre hit 48 home runs (more than double his previous season high) with a .334 batting average in 2004. Beltre will reach his performance bonus thresholds if he reaches his 2004 statistics, but 2004 may also have been a career year so likely he will fall short even with a successful 2005 campaign. This is Beltre’s first eTopps card, and he is clearly deserving of it. But until I get a better sense of how the 2005 cards sell and relative prices, I am cautious and most likely this card will slip somewhat in price. I recommend DO NOT buy this card at IPO, though Mariners or Beltre fans may want to pick up one or two for their collections and dollar average down if prices fall.

Albert Pujols (2,600 @ $6.00)

Pujols continued in 2004 to be among the elite top players in baseball. After four seasons, Pujols has a career batting average of .333 and has hit 34 to 46 home runs per season, becoming the first play to hit at least 30 homers in each of his first four seasons. This represents Pujols’ fifth eTopps card, and it will automatically have the lowest print run. The 2001 card, with 5,000 issued, has a recent 7-day average of about $46.00, while the 5,531 2002 cards hover around $5.00, the 3,000 2003 cards are about $7.50, and the 3,750 2004 cards are about $5.00. As Pujols’ short print and with the prices for his prior cards being at least $5.00, I would expect this card should be able to at least hold IPO prices and could rise. BUY this card at IPO.

B.J. Upton (3,900 @ $6.75)

Upton is a highly-rated rookie, having made his debut for the Devil Rays in August 2004. Upton has good speed and power, but will need to mature defensively. He will be carefully watched at shortstop, but could also play third while Rocco Baldelli recovers from a knee injury. If he performs poorly, though, he will need to hit impressively to avoid being sent to the minors for more grooming. This is one of the highest potential rookie cards, but until Upton proves that he is ready for the majors the card will fight to stay at IPO with a high print run. I believe this is a POOR BUY at IPO, but could be a good long-term purchase on the secondary market when the price falls below $5.00.

Carlos Beltran (2,600 @ $6.00)

Beltran was the top free agent during the offseason, and the Mets have made a major investment in improving their future with his signing. While Beltran’s batting average dipped when he shifted from the American League to the National League, he will likely make the adjustment even more successfully this season. Beltran also had a superb postseason, and will aim for a 40 home run, 40 stolen base season in 2005. This is Beltran’s third regular eTopps card (he also has an event card for hitting five postseason home runs in the National League Championship Series). Beltran’s 2004 eTopps issue sold 2,500 cards and has a 7-day average of about $4.00. Unless this card sells far below the maximum or Beltran contends for NL MVP, I would expect this card to fall to about the same price level. I DO NOT recommend buying this card at IPO.

David Wright (3,900 @ $6.75)

The Mets have high hopes for their rookie third baseman. Wright is a solid hitter, hitting both for average and for power, and does not appear to need to adjust to major league pitching. He is also a solid defensive player. Likely to sell out or to nearly do so, the large print run will likely limit the price potential, but this could be a good long-term investment. I will seek to buy my copy when it sinks below $5.00, so I recommend DO NOT buy this card at IPO.

Livan Hernandez (1,300 @ $5.00)

Since winning the World Series MVP in 1997 with the Marlins, Hernandez has been a solid but not overwhelming pitcher. With a 95 win, 94 loss career record, Hernandez has been most prominent in recent years for leading the majors in innings pitched each of the last two seasons, and pitching 200 or more innings in six seasons (and he was only one-third of an inning short of the level in 1999). Toiling in relative obscurity in Montreal, he will be more prominent as a lynchpin of the Nationals’ pitching staff. While he may not be an all-star pitcher, the 1,300 maximum print run would have put him as the second-lowest print run in the 2004 set. Further, he represents the first Nationals player, giving him an initial advantage for novelty value. Given the low print run and the Nationals’ novelty, I give this first-year eTopps card a WEAK BUY recommendation.

Boston Red Sox (2,600 @ $6.75)

Etopps debuts the sophomore class of baseball team cards with the World Series contenders, and sets a high print run for the World Champion Red Sox. But the Red Sox, despite losing Pedro, will need to win more than 101 games to earn their season bonus level, and will no longer have the impetus of the 87-year drought to motivate them to the World Series title. Clearly still one of the top teams, the Red Sox have potential to earn some bonus points, but I would expect the 2004 card and the postseason event cards to have nearly sated Red Sox team card interest, and diehard fans will seek mementos from the historic 2004 season rather than 2005. I recommend this as a WEAK BUY at IPO.

St. Louis Cardinals (1,300 @ $6.75)

The Cardinals, too, remain among the top teams and have reasonable prospects of repeating as National League Champions. Further, the 1,300 print run is half that of the Red Sox, and makes it the lowest print run so far for a team card. They too would need to win 101 games to reach the season performance bonus level. With the lower print run, I recommend BUY this card at IPO.

This week’s best buys are both Cardinal red -- the Pujols and Cardinals team cards. But I’m excited to buy my first Washington Nationals’ card even if I would not otherwise have purchased Livan Hernandez.