Third Impact on the FAB Market

Yeah, I’m just going to keep referencing old media with these weak title jokes; you can’t stop me. Anyway, I’ve spoken before about spikes in the FAB market, which I’ve also referred to as catalyzing events. That is, events which cause substantial and near instantaneous market shifts that realign values permanently. There can be some retracing after these events. In fact, there usually is, but prices never get back down to where they were before. Last night what I’m considering the third such catalyzing event occurred.

For those who are new to the game, the first event occurred on August 25th 2020 when Legend Story Studios announced ARC and WTR unlimited edition and the associated limited nature of cold foils. This announcement precipitated an immediate sell out of all remaining alpha boxes from retailers and spiked secondary market prices. Over the next couple of weeks, we saw prices of an alpha WTR box spike at around $500 before eventually retreating to $350, and then creeping up to $400-425 right before the second event. This first event was interesting because we had a tease for a big announcement for several days in advance, and community speculation had been circling something of this nature, so as soon as it was official, the switch was flipped and the market went crazy.

The second event was the ChannelFireball (CFB) partnership announced on October 20th 2020. In this case LSS was partnering with a large retail outlet, but most importantly CFB was going to be creating media content for FAB, something that they only did for Magic and Pokemon to this point. The implications were significant, and an entity of CFB’s reach getting into the FAB market signaled confidence in the product for players and investors. Once again prices rose sharply until we settled into $900 a box for WTR alpha. What was notable about this particular event was that part of the deal, which had been in the works for months, included CFB getting a large quantity of sealed WTR and ARC alpha product that had been reserved for them since early 2020 should the deal go through. For the past month I’ve been saying that CFB has actually been holding these prices down because they haven’t raised prices on their large stock of these boxes. Well, that all changed last night.

The third catalyzing event wasn’t the event itself, which we don’t really have a date for but rather the revelation of the event on December 13th 2020 by Rudy of Alpha Investments via an update to his patrons. It’s been reposted all over the internet, so I think it’s safe to say that it’s no longer privileged information, and I’ll repost the full update below:

There had been some speculation on how much stock CFB had left in reserve, but that $300k+ number means a substantial amount of product was still in hand. Prices immediately spiked on ebay and all product below Rudy’s thresholds dried up there in under an hour. I think a lot of people focused on Rudy giving those prices and missed one of the major implications of this message. An individual who could afford to invest a third of a million dollars in FAB saw it as a good bet. This is important for a couple reasons. First and most obviously, this signals confidence in the game. But, also of extreme import, that product is now effectively gone from the market. I feel quite confident in saying a person making this sort of transaction is not in it to flip product. This is a long term investor scoping out a massive position in the market. These boxes are gone, likely for a period of many, many years barring the game’s decline. They also took out the single biggest source of sealed product in the same move. Prices, particularly on WTR boxes, may go back down somewhat, but the $900 box is now a thing of the past.

Chasing Highs

Common financial advice is to not try to time the market, and this is a good example of why. In the past few weeks I’d been saying that there would potentially be a shot at $80 or so CRU when Reaper Games restocked, but that is unlikely now. My advice for the past week or so was a note that I already had cases in hand, but an $80 box was something I’d definitely be padding out my position with; however, for people who wanted some and didn’t have any already, $100-120 boxes are a reasonable pickup.  As anyone who has been reading my articles knows. I’ve been bullish on sealed Crucible since my very first financial article. At the time, I was predicting a $200 box when the OOP announcement hit in what I assumed would be early 2021 with a $300 box by end of 2021, but potentially by Monarch. It looks like we’re headed there a bit quicker. Boxes were selling at $250+ last night, and cases are moving steadily at $750-850. At $200 a box, I think there is still long term money to be made, but you’ve now officially missed the opportunity for a quick flip for huge gains. That said, if we get another catalyzing event, you’ll probably see a spike in CRU value potentially to $400-500. Again, I wouldn’t bet on that, but if you want long term product with upside, don’t hold out for boxes to retrace to $120; that’s over. This is a good case study on why trying to time your buys can be dangerous. If you had no product and you were waiting for $80 boxes, you now likely have no product and are unlikely to see more than a couple sub $150 boxes again.

As an aside, I would advise people who have interest in Team Covenant’s pre-orders for MON, which I spoke about here to get their subscriptions in soon. Remember, TC doesn’t collect money until a couple weeks out, they have a limit to how many subscriptions they can offer because there is a fixed number of promos they’ll have (we don’t know how many, but they’ll be rare). These promos are unlikely to get as high as Scar for a Scar did, but there is an incredible amount of potential for them still, especially with overall demand for the game going up. I personally increased my pre-order quantity from them early yesterday and then did so again when the Alpha Investments news landed. Zach of TC has told the Discord financial channel that they will likely sell out of pre-orders at some point, so don’t get caught waiting (especially when you don’t have to pay up front). If you want them, get them now.

Rolling with the Punches

Finally, I want to close with some personal anecdotes about trying to react to these sorts of events as they happen and what sorts of windows I’ve seen in FAB. The sole upshot of COVID for me is that since I am now pretty much always at my computer, I get FAB news as it happens. When the Unlimited announcement came, I dropped everything and started scouring stores for stock and building out my list of small retailers, fortunately I had been buying boxes of WTR the week prior which I had intended to open, but were still in the mail so those formed the base of my position, as they arrived. A few hours of frenzied scouring got me a few additional cases before things dried up. Last night I got the patron message from Rudy and immediately popped open that list of stores and started grabbing every box I could find for $130 or less. Even then, that only added up to several additional cases as most stores were sold out before the announcement. I had a similar experience buying up cheap cold foil Commons in the wake of the CFB announcement. I got several hundred dollars of them at $10 a piece during a window of a couple hours and then they were gone.

Knowing your own level of engagement with the game, you should ask yourself if you can expect to get news of these events within a few minutes of them being announced and if you’re prepared to move within the first 1-2 hours. If the answer to either question is “no”, then you have almost no ability to capitalize on these tiny window, which grow smaller and smaller as more people get into the game. Again, this means you need to act earlier and not try to thread the needle once something has become a sure thing.

*Header Image – Screengrab from End of Evangelion

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