Mudrick Capital, Eyeing NFTs, to Take Baseball Card Firm Topps Public Through $1.3 Billion SPAC Deal

Jason Mudrick, founder of Mudrick Capital, said Topps is well-positioned to capitalize on the hot market for non-fungible tokens.

Jay Paul/ Bloomberg

Jay Paul/ Bloomberg

Sports memorabilia company and digital-asset entrant Topps announced Tuesday it will go public through a merger with Mudrick Capital’s special purpose acquisition company in a deal that values Topps at $1.3 billion.

Topps, an 80-year-old company that made its name selling baseball cards and Bazooka chewing gum, is trying to reinvent itself by leaning into e-commerce and the trend around non-fungible tokens, or NFTs. NFTs are unique and tradable digital assets that can be authenticated through the use of blockchain technology. In recent weeks, NFTs have fetched high prices, including a piece of digital artwork sold at auction for $69 million last month.

Jason Mudrick, founder and chief investment officer of Mudrick Capital, said in an interview with Institutional Investor that Topps is an attractive business with strong growth aspects, NFTs aside.

“We really underwrote the investment just on the existing business,” he said in a phone interview. “That’s what’s so attractive about the opportunity, that you really get the upside of the NFTs for free.”

Mudrick said that Topps’ “universally recognized brand” puts it in a strong position in the NFT market. He noted that one of the weaknesses of the current Topps business model is that the company misses out on gains from secondary transactions, or when baseball cards, for example, are exchanged between individuals.


“With blockchain, that will allow the company to participate in the secondary market trading of collectibles for those that want to trade digital,” he said. “It’s better for the consumer because they can carry their collectables in their pocket and they can trade them at any time of the day, anywhere in the world. For Topps, because they own the IP behind it, they can participate from a revenue standpoint. That’s revolutionary.”

The company posted strong signs of growth in 2020 as the pandemic gave a boost to demand for memorabilia and the company leaned into e-commerce and digital assets. Topps said it generated sales of $567 million in 2020, a 23% increase from a year earlier.

“The strategies we have implemented in recent years, including building a digital business that has deepened consumer engagement, have driven excitement and innovation across Topps, fueling strong and increasing revenue with accelerating profitability,” Topps CEO Michael Brandstaedter said in a statement. “Topps is an 80-year-old company with decades of rich tradition and history, but very much built for the 21st century.”

The announcement of the SPAC merger noted that private equity firm Madison Dearborn Partners intends to sell most of its stake in Topps, but former Disney CEO Michael Eisner will remain as Topps’ chairman and his firm will roll its equity stake in Topps into the combined company, according to a filing with the Securities and Exchange Commission. The deal also includes a $250 million private investment led by Mudrick Capital as well as institutional players GAMCO Investors and Wells Capital Management. The New York Times first reported the deal.

The combined firm will trade on the Nasdaq under the ticker symbol “TOPP” once the deal closes in the late second or early third quarter, according to the announcement. Shares of MUDS, which began trading in January, were up more than 11% in early trading Tuesday.