Topps SPAC: Everything you need to know about Topps
Rebecca Cattlin August 19, 2021 6:30 AM
Trading card company Topps is set to go public via a SPAC merger with Mudrick Capital that could value it at $1.3 billion. Find out everything you need to know about the company ahead of its listing.
Topps SPAC: When will Topps go public?
Topps is expected to go public via a SPAC deal in Q3 2021, listing on the Nasdaq market under the ticker symbol ‘TOPP’. The company elected to use a blank cheque company due to the flexibility and ‘limited distraction to management’, according to a statement by chairman Michael Eisner.
Learn more about what a SPAC is
The transaction includes a private placement of $250 million and will be led by Mudrick Capital with investment from institutions such as Gamco investors and Wells Capital Management.
In August, Mudrick Capital investor Lawrence Bass announced intent to sue the company to prevent a vote that would change how shareholders approve the share issuance that’s needed to close its merger with Topps. Shareholders are voting to approve the company’s plans to increase the number of Class A shares from 100 million to 350 million – which would dilute the value of investors’ stakes according to the complaint. Bass said that while currently Class A and B shareholders have to vote separately, the company is trying to change its charters to call for a combined vote, which could alter the outcome.
How to trade Topps shares
Once Topps has listed, you can trade its shares in the same way you would any other company on the stock market.
In the meantime, trade stocks with FOREX.com in just a few quick steps:
- Open a FOREX.com account, or log in if you’re already a customer
- Search for the company you want to trade in our award-winning platform
- Choose your position and size, and your stop and limit levels
- Place the trade
How much is Topps worth?
The Topps SPAC deal values the company at approximately $1.3 billion. In 2018, the business was estimated to be worth $400 million, so the company has experienced decent growth to achieve its new valuation. This growth largely comes as a result of a boom in the sector during 2020 caused by homebound consumers returning to collectibles as well as new blockchain-based products.
What does Topps do?
Founded in 1938, Topps is a leading creator and marketer of sports and related cards, entertainment products, and confectionery. It has an exclusive license with the Major League Baseball to produce trading cards that feature the league’s players and logos. In 2019, it paid the Major League Baseball Players Association $18.7 million in licensing fees as part of its agreement that will end in 2025.
How does Topps make money?
Topps makes most of its income through sales of its sports trading cards, but has also expanded into mobile apps for collectors, non-fungible tokens (NFTs) and gift cards. It also has a candy segment that includes brands like Bazooka, Ring Pop and Baby Bottle Pop – which accounts for 35% of the company’s sales.
Is Topps profitable?
Yes, according to Topps Co’s Q1 2021 results, net income grew from $23.0 million to $23.4 million year on year on the back of $166.6 million in revenue, which itself increased by 55.3% during the period.
According to chairman Michael Eisner, ‘The company today is exactly the same financial position that Disney (DIS) was in 1984 to the dollar… if we do one-tenth as well as Disney, I will be very happy.’
What is Topps's business strategy?
Topps’s business strategy is focused on building customer engagement, driving excitement and innovation across Topps, and fuelling revenue growth with accelerated profitability.
The company aims to achieve this by diversifying its offering into e-commerce, mobile digital applications and digital e-gifting solutions, as well as the ever-growing market of NFTs and blockchain-based collectibles. Buying and selling NFTs is a similar concept to rare baseball cards, as each NFT is unique and can’t be duplicated.
Topps has also expanded away from just its traditional sports fan base, and has started producing on-demand Topps NOW cards that feature current events. For example, a card picturing Bernie Sanders sitting in his jacket and mittens that went viral sold over 91,000 copies.
Who owns Topps?
Topps is owned by Michael Eisner, former Walt Disney CEO, who currently serves as Chairman of the firm and will retain his post following the SPAC deal. Eisner bought Topps in 2007 for $385 million through his investment firm Tornante and Madison Dearborn.
Madison Dearborn will sell most of its shares in Topps amid the SPAC, but Eisner’s firm The Tornante Company will roll its entire equity stake into the new combined company.
Based on Mudrick II’s recent share price, Eisner will have about $540 million in shares due to his ownership stake of about 46 million shares – this includes a supervoting class crafted only for him, granting 86% of voting power.
Board of directors of Topps
Following the combination of Topps and Mudrick, the company’s board of directors will comprise of:
- Michael D. Eisner, Chairman
- Meltem Demirors, Board member
- Andrew Redman, Board member
- Eric Eisner, Board member
- Maria Seferian, Board member
- Jill Ellis, Board member
- Scott Pasquini, Board member
- Marc Lasry, Board member
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.