An Introduction to Buyouts
Welcome One and All to the Greatest Show On-
Wait what’s that? Everfest isn’t out for another few weeks?
Oh. Well, uh... I guess let’s talk about something else then...
How about buyouts? Yeah, that sounds good.
Today we’ll cover: what a buyout is, how they work, how they succeed or fail, potential targets in Flesh and Blood, and where we might be seeing them already. So, without further ado, let’s begin the show! Oops, still stuck in Everfest carnival barker mode. Let’s just start the article.
What is a Buyout?
A buyout occurs when a person or group of people target a specific card or subset of cards to purchase. They’ll usually select a specific price target and purchase every available copy of that card on the open market below that price.
One byproduct of this is that, as copies are acquired, the market price will rise. This means that the first copy purchased in the buyout will likely be notably cheaper than the last one.
It also means that you want to be as coordinated as possible to spend the least amount of money on the initial buys. That requires you to buy the available copies quickly before the market realizes that a buyout is occurring and adjusts prices upwards.
Once you have all of the available copies at or below your target price, you have, in theory, set a new floor price for that card, and now new listings will debut at or around that price.
What’s interesting is that, once the buyout is recognized, it can generate additional price movement as people who may have had that card on their “I want to get one of those as some point” list rush out to get a copy before it goes even higher (after all, they don’t know what your target price is).
After that initial movement has occurred, a few things can happen. Either the market will solidify around the new price you’ve introduced, it will push a little further as other people scramble to get copies (the scenario I just described), or the market can reject the price and you’ll see it fall back down somewhat unless you continue to absorb copies. (In that last scenario, you might still have a successful buyout as long as the downward pressure isn’t too significant.)
This will serve as a pretty simple overview of buyouts; now we’ll dig a bit deeper.
How Buyouts Succeed or Fail
In my estimation, the two biggest factors in whether a buyout works or not are:
- was the card(s) selected a good target, and
- did the people involved have the discipline not to dump their copies too soon?
A buyout will fail if its target is a poor choice. What defines a poor choice can vary, but here are a few obvious examples.
Choosing a card that is too plentiful relative to the resources of the person/people buying the card. Say, for example, that you wanted to target first edition Overblast (red) for a buyout with a target of $5. These currently sell for less than a dollar and there are dozens easily available on major sellers’ sites, to say nothing of smaller sellers. However, there are thousands of copies sitting around in people’s bulk bins, and once the price gets up to $2-3, more people will start dumping their copies onto TCGPlayer and other marketplaces as they correctly assess that no change has occurred in competitive or casual play to justify the price hike.
This will then begin to challenge your resources. Buying a couple hundred cards at $0.25 isn’t too bad, but buying the additional hundreds that hit the market as prices rise will be a bigger financial demand, and the more you buy, the more likely people are going to be to dig through their bulk boxes. Once someone who opened a few dozen cases of CRU sees the price at $4, they might take the time to dig out their 100+ copies and throw them on TCGPlayer for you to buy.
In all likelihood what happens here is that the actual available supply is more than you can reasonably handle or keep up with, so you’ll end up spending a lot of money, eventually become overwhelmed by the supply and then prices will begin to fall as people race to undercut each other and cash in before prices slide back further. It’s also worth noting that low value cards like this involve a lot of overhead in terms of time and shipping/materials costs, which also makes them less appealing targets.
Buyouts work best when the targeted card has few copies available and the reserve supply is likely also relatively limited. However, ultra high-end cards aren’t a great target either, because they cost a lot of money and they’re relatively illiquid. There might only be a couple cold foil Tunics available on the market right now, but the demand for them is also low because most people are priced out of ownership. You’d tie up a lot of money trying to push the price up, and you could be waiting for a long time to see buyers emerge at whatever price you were hoping to sell at.
This ties into the second point: buyouts that are being coordinated by a small group require everyone to hold the line and not sell too soon. Buyouts tend to be a safer thing to do when your goals are long term. If you clear out a scarce card below a target price with the idea that you’ll probably sell in a couple years for a solid profit, that’s a much more reasonable expectation than assuming you’ll be flipping for big money in a couple months. What you really want to achieve is setting a notably higher but stable floor price and cashing out over time. You will not be able to just take your whole hoard and sell them at once.
What about FaB?
For FAB, the best targets are going to be cards that are first edition printings that are not reprint candidates, followed by cards that are first edition printings with low print numbers. We already talked about how high end cards like cold foil Legendaries are tricky targets, so what does that leave us with?
Well, my perennial favorite of WTR/ARC non-foil alpha/first edition: Majestics clock in at ~3,333 copies each, with the actual number being a bit below that due to the remaining unopened boxes coupled with cards that have been lost or destroyed. If we pick a random one of these (let’s avoid the big ones like Enlightened Strike- we’ll say Crippling Crush), we can see that (at time of writing) there are only four copies available on TCGPlayer, and of those, one is heavily played, so probably not particularly desirable. At a lower price point, first edition WTR cards with the famed “pink stripe” are another potential candidate, particularly the non-foil Rares and Super Rares, as well as rainbow foils of any rarity. Again, look at the quantities of these cards in near mint condition that are easily available on TCGPlayer: there are 4 NF Snatch (red), 8 Sigil of Solace (Red), 6 Sink Below (Red), etc.
Are there any active buyouts in FAB right now? It’s hard to say for sure. If we return to NF WTR Majestics, we can see that TCGPlayer only has 2 listings below $30 shipped, both from the same 0% feedback seller. But when we look at the past sales data, a fair number of class Majestics sold over the past month for under $30, and a big chunk of those all occurred on 1/8. This could suggest a buyout with a $30 target price, or it could suggest something similar but more passive – someone who has done the mental work of determining a price that they think of as “too low” for these cards and periodically buying them out, but not actively engaging in following the market like a hawk and scooping up any copies that emerge. This pattern of behavior is sort of like a soft buyout, in that it can drive the price up over time, but it also allows more room for prices to retrace.
Why Should You Care?
I’m definitely not writing this to send people out to attempt their own buyouts. Frankly, I think that more people would fail than succeed with that. If you actually want to attempt a buyout and haven’t done it before, you can use this as starting point, but I would go look for additional articles and videos to figure out if it actually makes sense for you.
For the average person engaging with FAB, I think the big takehome here is being aware that buyouts exist and identifying which cards on your “I want to get some of those at some point” list might be vulnerable to a buyout. This is one of the factors I think about when I buy cards for myself. If all other things are equal and it’s not like I need a card right now for a deck, it often seems to make more sense to pick up the cards that are more vulnerable to having their prices manipulated upward than ones that look like they’ll be stable for a while.
Ada (Freyja on Discord) got into Flesh and Blood a few months before it took off in the US and has been heavily involved in the financial side of the game ever since. When she’s not writing finance pieces for The Rathe Times, her FAB-related writing can be found on her blog: https://fabwithfreyja.com/
Great article, Ada! I'm still the proud owner of 434 copies of Forged for War (UNL) @ $0.17/ea cost-basis from an experimental solo-buyout with some private buy listing on the side. What started as an interesting financial experiment and speculation around the added synergy of Forged for War when paired with Rampart of Ram's Head will likely turn into a rather interesting financial article on Rathe Times, one way or another.
For more information, search for "pump and dump scheme".
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