I want to attempt at writing a post on the subject of growth and decline in the hobby, but I want to preface this with saying that this is a bit out of my depth. I havent really had a lot of experience with studying the card market and its fluctuations, but I think I have a number of questions, and some baseline ideas around market manipulation that bear some discussion.
Last week, CardLadder introduced the concept of “Verified Sales” on the heels of a few trends they were seeing the market. In one such egregious example, the sales of Patrick Mahomes’ Prizm RC had been manipulated 16 out of 20 times. Only 4 sales of the card in recent months had been legitimate, and they ended on average around $1500 less than the shilled sales. Going back to my post from a few weeks ago, should we or can we trust what is going on right now with certain market growth trends?
Lets go back a ways to see how specific tactics have influenced things in the past, because – AND I KNOW YOU WONT BE SHOCKED TO HEAR – this has happened many times before the boom even began. Market manipulation has happened so frequently that I would guess a feature length documentary wouldnt be enough time to cover this subject.
The first time this really made national news was back when PSA first started their card grading service. A trimmed Honus Wagner was sold as authentic, and did so for a record price. Because the card was already rare and valuable, it kick started a number of sales around Wagner that still stand up today. The people involved in this scandal have long been outed and books written, etc. Even though the source of this market growth was based on an altered card, the prices never went back to where they were before. In fact, if that card sold today, even in an altered state, the price would exceed its original market making example. That is the issue here, and it happens in art, it happens in comic books, and it happens in any industry where collectibles and money are involved. All it takes is a few dominoes to fall, and then the FOMO kicks in.
Funny enough, there were a few collectors that tried to manipulate a market after seeing how easy it was, and were oddly successful at accomplishing their goal. Back around the time that the hobby really started kicking into high gear, a few Michael Jordan collectors decided they wanted to create some growth in a number of cards that they felt were undervalued. They included some rarer high grade inserts from the late 90s and early 2000s, and started selling within their group at record prices. These sales were so far above the norm, that collectors on Blowout’s message board immediately started questioning the legitimacy of the sales. Because the supply of these cards were so small, and the market was a fraction of what it is now, it only took a few sales to change people’s perception of how much these cards were worth. Most people would expect the prices to go back to their expected value, but they didnt – those specific rare inserts remained more valuable than other similar Jordan examples from that era, just because of the manipulated sales that helped to create extra value.
Seeing what we have seen across multiple areas of the hobby over multiple eras, it brings a number of things in scope for questionable practices. Whether it is something with an absolutely tiny market like Vintage wrestling had, or something larger like what has gone down with graded Marvel cards and any of the Precious Metal Gem cards . It wont be long before a six figure sale goes down in those niche markets, and we could eventually see an eight figure sale go down in PMGs. Where does that growth come from? Where does it start? In some cases, its the already expensive pieces getting exponentially more expensive, but in the case WWE and Marvel, it seemed to come out of NOWHERE. Even more problematic is how few people owned the majority of the now high valued assets.
Seeing Cardladder try to curb market manipulation is a bold step, and one that has been needed FOR YEARS. At the same time, CardLadder is a premium service that isnt as widely used as the sold auctions listing page on eBay. Being that CardLadder was just acquired by PSA’s parent company, there are automatically conflicts of interest involved in the display of investment data for graded cards that are sold by their backer.
Shilling and manipulating auctions to achieve a higher price isnt a new thing, and it isnt one that will stop because its so easy to accomplish – especially for a highly desirable piece. Consignment shops like PWCC and Probstein have faced constant barrages of accusations, to a point where PWCC was banned from eBay’s platform all together. Obviously it hasnt stopped their success, launching their own platform where the rules are enforced by the accused, but I digress.
Honestly, I dont know what Im trying to get out of posting my thoughts here, other than venting frustration that people seem to be gleefully participating in a market worth billions, yet have no accountability to the obvious need for regulation. The biggest players in the hobby freely operate in a manner that suggest gross abuse is possible and present, and have yet to be held accountable for any of those conflicts of interest the way that the video game industry has to a significant degree recently.
Because the auction houses, the grading companies, and the dealers all have very public and very dependent relationships, there are huge issues with using any data from those platforms in a way that makes sense. We can hope that the sales data gleaned from their pages is legit, but there are too many examples of wrongdoing to ignore. So many federal indictments later, and we are just expected to roll over and say, “Sure! I fully accept all this at face value.” Personally, thats quite a stretch for me. The hobby is made up of a number of good people, but underneath that surface is a cesspool of criminal activities insulated by willing ignorance from the public. Sometime soon, I have a feeling that someone will need to pay for their mistakes, and it wont be the people that should be on that hot seat. I mean, that’s what always happens, right?