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Zion’s Polarizing Place in the Hobby

Zion’s Polarizing Place in the Hobby

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There may be no other player in the NBA today more scrutinized than Zion Williamson. After a fantastic freshman year leading Duke to the Elite Eight, the 6’6” power forward declared for the draft. Unsurprisingly, New Orleans selected Williamson with the first overall pick in a loaded 2019 class. As his name was called by commissioner Adam Silver, Williamson commanded everyone’s attention as he walked on stage donning a crisp, all-white suit, perhaps a nod to his hyped-up predecessor from nearly two decades prior.

Since that runway moment three years ago, though, it’s been a tumultuous road for the 21-year-old hooper. Is he on the way to being the next Kevin Durant or merely another Greg Oden? With the NBA Playoffs winding down and basketball’s busy offseason fast approaching, the timing couldn’t be better to analyze some of the trends in Zion’s trading card values, and outline why now may be a good opportunity to find value in the Pelican paradox.

SELLING TO BUY

Not too long ago, it was common for collectors to look for value in certain players or sports during the offseason. For example, after the Super Bowl, it was not surprising for buyers to find deals for certain NFL players before the next season started. Although there is merit to this strategy, the hobby has exponentially grown and the amount of information regarding prices and demand has become easier to find, making it a cinch for others to use this same strategy. So, how can we think outside the box with regards to Williamson buys?

A strategy that I like to employ is actually selling specific players when everyone else seems to be buying. The ever-exciting Ja Morant is a perfect example. After leading the historically mediocre Memphis Grizzlies to the second-best record in the NBA and winning the league’s Most Improved Player award, Morant demand has been on the rise.

One school of thought is that if Morant leads Memphis to the NBA Finals or even wins the championship one day, his cards could increase exponentially from where they are now. If I owned some of the rarer Morant cards, I would sell them right now. Subsequently, I’d reinvest those profits to buy cards for top players who have been knocked out of the playoffs and are currently waiting for next season to start. Zion fits this category nicely.

HISTORICAL TRENDS

One could argue that Zion was the most hyped player since LeBron James. With sky-high expectations and a constant magnifying glass over him, collectors rushed to get their hands on Zion cards during his ’19-20 rookie campaign.

If we look at Zion’s 2019 Base Prizm, we see that the value of this card in a PSA 10 more than doubled from roughly $450 to almost $1,000 over a 12-month period in 2020. To be clear, this is not one of Zion’s most revered base cards. (It is, however, PSA’s most graded gem mint card of all time.) The point we’re proving here is that collectors were paying significant money for even the most basic Williamson cards just two years ago. Recent sales for this card, however, have fallen under $200. The questions we should be asking are: what caused the precipitous decline in price action, and why should we believe that there is value to be found in his other cards?

Zion has played a total of 85 games over the last three years. As you know, there are 82 games in the NBA’s regular season. This means that in his three years as a professional athlete, Williamson has basically played the equivalent of one campaign. It is important for Zion novices to realize that the young man has battled knee and foot issues since his college days. As a result, his action in the NBA has been quite limited, leading some to question his potential as a player and, therefore, the long-term value of his cards.

As an investor, sometimes it can pay off to gravitate toward these kinds of distressed assets. One adage that I often remind myself is that it’s ok to take risks, so long as it’s not a gamble.  

Perhaps a great comparison for Williamson’s early woes is Philadelphia 76ers superstar and MVP finalist Joel Embiid. We should remember that after being selected third overall in the 2014 NBA Draft, Embiid sat out the 2014-2015 and 2015-2016 seasons due to foot injuries. However, after making his debut in the 2016-2017 campaign, Embiid has evolved into a five-time All-Star, a three-time All-NBA selection, a three-time All-Defense Team selection and two-time MVP finalist.

The graph here illustrates the dramatic price fluctuation of Embiid’s 2014 Base Prizm rookie in a PSA 10. We can see that after Embiid became a dominant force in the NBA over the last few seasons, the value of this card increased significantly. Had you invested in this card between an uneventful ’14 and ‘16, you could have potentially made multiples on your initial purchase by now. Could Zion’s cards make a similar turnaround?

POTENTIAL CATALYSTS

Let’s take a look at what factors could drive some value in Zion’s cards as he returns as the nucleus for New Orleans next season:

  • Making the All-Star Team (which he did in 2021)
  • Making an All-NBA Team (with career averages of 25.7 points, 7 rebounds, 3.2 assists and nearly 1 steal per game, Williamson certainly makes a solid candidate as a two-way force).
  • The Pelicans surprised everyone with their first-round battle against the NBA’s best regular-season team, the Phoenix Suns. With Zion’s return, an already-impressive roster of Brandon Ingram, CJ McCollum and Herb Jones gets even better. A deep playoff run could lead to a late-season price surge in the big guy’s cards.
  • Lottery picks have a history of winning awards. If Zion comes back healthy and leads the Pelicans to a winning season, don’t count him out for Most Improved Player or one of the NBA’s other top honors.

HOT CARDS

The items below are some of Zion’s most coveted rookie cards. Let’s dig in and analyze the price movements and where we may be able to identify some arbitrage opportunities.

Color Blast

Generally speaking, some of the most popular cards in the hobby are Color Blasts. Two examples include Zion’s 2019 Spectra and 2019 Prizm Draft Picks. We can see that a Spectra BGS 9.5 most recently sold for $8,150 in April 2022, representing a 27% decline from its initial sale in July 2021.

The lone BGS 9.5 transaction of the 2019 Prizm Draft Picks Color Blast happened back in February. The infrequent sales could spark a unique opportunity to buy an otherwise in-demand item that is both declining in value and has a low pop. That said, now may be an optimal time to get your hands on a Color Blast. Even if you find them raw, with the NBA season nearing its end, you have ample time to get the card graded before next season, when Zion could make a comeback and see increases in card values.  

Kaboom!

Similar to Color Blast, collectors love Kaboom! cards, too. Williamson’s 2019 Crown Royale #18 Kaboom! has fluctuated in price quite a bit. At publishing, PSA reported that 16 of Zion’s Kaboom! had gem minted. We also know that the most recent sale of this card was for about $7,000 in April 2022, a decline of 40% from its initial July 2021 sale. Given we know there are 16 of these vibrant cards available, this particular Zion rookie has a market capitalization of just over $100,000.

There are a couple of ways we can play this as investors. First and foremost, a collector could keep his eye out for this card at shows or online. With a relatively low pop, it could be a lucrative investment if you try to corner the market and buy up the remaining PSA 10s, thereby allowing that person to control the price over time.

A second way to go about this is to seek out this card raw, and determine if it’s worth getting graded. Should it meet the criteria for a PSA 10 or equivalent, you may have an opportunity to buy raw at a lower valuation and sell higher should the card return with a gem mint grade.

Prizm

The biggest thing to keep in mind with Prizm is that not all of them are created equal. There are base cards as well as colorful derivatives such as Red, Blue and the iconic Silver. Special designs such as Cracked Ice are also quite popular. On top of that, you have a host of numbered Prizms as well. Zion’s 2019 Prizm Red /299 in a PSA 10 recently sold for $2,700. That’s a 17% decline from its prior sale and 65% off all-time highs in February 2021.

By comparison, this same card in a BGS 9.5 sold for $1,725 in mid-May, which was lower than an early-May sale of $2,050 and significantly off from a $4,200 deal back in December 2021.

Like the cards above, this Prizm could be a good buy as it is showing decent signs of resilience, but still trading far lower than it was when Williamson entered the league. A highly rated version of this card or a raw one may be worth scooping up as a value play, provided you have confidence that the raw could fetch a high grade.

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