I recently purchased shares of MUDS, who is to take the Topps Company public. Their primarily known for their collectible baseball cards, though they have other business units such as candies, digital memorabilia and have some unsuccessful forays blockchain techs. Their crown jewel is their 70 year relationship with the MLB for an exclusive license to brand their baseball cards. While its possible to make baseball cards without the branding (a competitor, Panini, does this), it certainly is a major part of their value add.
Topps reported big earning beats yesterday while raising guidance for a second time this year, but it was just leaked today that they had lost their exclusive MLB branding contract. Their current contract expires in 2026. Baseball cards make up roughly half of the revenues of Topps and is one of their most profitable business units. The news caused shares to nosedive ahead of the proposed merger that would take Topps public. For such a material change in business, is it typically worthwhile to cut losses no matter what the current market price is due to the change in fundamentals? Their baseball cards are my primary interest in the company, and I have little interest in their digital and confectionary ventures.
Submitted August 19, 2021 at 09:37PM by shimszy https://ift.tt/3CZpCVs
