Welcome to the second of three articles that will review the eTopps experiment for the past year. It's been a wild one. With issues down this winter and people complaining on the message boards that eTopps is doomed, we at eTopps Clubhouse thought that it would be a good dose of reality to take a look back over that past year to see exactly how we, as eTopps collectors and speculators alike, ended up where we are today.

Part Two - "From Rags to Riches" or "From Cardboard Cup Holders to Caviar Dreams"

As the hollow pop and crack of Major League Baseball's spring training camps got into full swing, eTopps buyers were looking at their portfolios, and crossing their fingers. Many chose to ignore the offerings of basketball and hockey, and why not? The issues were not selling well and the secondary market prices of the cards that did sell were not inspiring.

Baseball 2001 had been the most popular season the prior year, with Ichiro Suzuki managing to sell out 10,000 cards, and a few IPOs were still trading for two or three times IPO. The hope was that a second run in baseball would make the 2001 issues look more attractive as first year cards, and that a second year would at least show that Topps was, as they continued to maintain, committed to continuing the program.

At Topps as well, the management was looking to the baseball season with quiet anticipation. Although overall sales had been slower than they had liked, Topps was still dedicated to this experiment. They were preparing to throw out a few wrinkles that they hoped would spark interest.

Using the few cards that had grown dramatically in value as a springboard, Topps launched an aggressive media blitz with the slogan "Where your love of sports can pay dividends". They were hyping eTopps as a way to make a quick buck. Although they were careful not to promise profit, they positioned the higher valued cards in the forefront with the implied message being that there was more where this came from. TV ads appeared in baseball's pre-season games. Print and internet ads, at sites like ESPN.com and Sportsline.com, pressed home the message that something new and exciting was happening. eTopps cards were turning a profit and you could cash in as well…. All you had to do is check it out.

Topps also raised prices on their least expensive IPO from $3.50 to $4.00. To offset the price increase, Topps introduced the Performance Bonus program. In keeping with the stock market theme, you could now receive a dividend from your eTopps purchase! If the player met all of his statistical targets, you would get 20% of the purchase price back.

On the eTopps site, the company started migrating eTopps fans from their original, low-quality message board to a more robust platform. Many lively discussions took place, including many pleadings for eTopps to release statistics on how many of each card had been delivered to collectors "in-hand". Those requests were in vain. It was soon discovered that some members were manipulating market prices for some cards by bidding up their own auctions with other eBay ID's. A term was coined for this, "shilling". Investigation of these shady dealings by fellow eTopps collectors intensified and a website devoted to uncovering this activity sprung up.

eTopps investor Jeff Kaplan started a website which planned to offer tools for analyzing eTopps card price activity and determining the best buys. eTopps got the message and soon began offering more tools such as price history charts and each day's top winners and losers on eTopps.com. Dave Sultan, another eTopps enthusiast, then launched his etoppstrader.com website. It soon built a strong following. eTopps collectors would flock to the site often to chat with their fellow eToppers and make trades. eTopps collectors could also take part in eTopps investing competitions on the site and win eTopps card prizes.

Two figures on the eTopps message boards drew a lot of interest. "PapaTony" had cornered the market in 2001 Tony Banks eTopps cards sending its value from $6.00 to $600 eventually (and beyond). Many revered him for stimulating interest in the eTopps program. Others were more skeptical of his activities. "Big Lou" took every opportunity to bash the eTopps program. It seemed every post he made was a prediction that eTopps would soon crash leaving eTopps investors with worthless cards. But those who heeded his advice at that time were sorry they did. Some message board members theorized that "Lou" may have sold all of his eTopps cards early on, missing out on big gains down the line.

All was quiet on the eTopps front as baseball's all-star break approached. eTopps began running more commercials on ESPN and other networks and the eTopps website went down right on cue! Fans that saw the commercials overwhelmed the site and it was effectively inaccessible for over a day. Once things started returning to normal something many hadn't expected soon happened - eTopps exploded!

The summer of 2002 saw the greatest rise in secondary market prices in eTopps' short history. All of those short print issues in football, basketball and hockey that no one wanted to buy at IPO a few months earlier suddenly became the most sought-after cards on the planet. Every single basketball and hockey issue raced above IPO and never returned. Profits of 1000% were common. Many long-suffering eTopps collectors cashed in, and were able to buy clothes, jewelry and cars with their gains.

Print runs went up dramatically. It looked like the day of the sub-1000 print run was gone forever.

Buoyed by the promise of a performance bonus, traders bought as many 2002 baseball cards as they could get their hands on, and immediately sold them on the secondary market - most for impressive profits. This became known as "flipping." Thursday became a much-anticipated day, as this was the first day that you could see how well your recently acquired card would do on the second-hand market. Many people bought and sold frequently - using their winnings at the next IPO. The market run-up continued through July, with many issues trading for more than twice IPO.

Baseball was not the only winner. Almost every card that had a print run of less than 1000 became very sought-after. Prices leapt from $3.00 to $30.00 and beyond. With the massive influx of buyers, every card was rare and immediately collectable. The people who bought the cards at the $30.00 did so with the belief that the cards value would go up even further.

The summer also brought the first Classics cards. Baseball Classics were an almost instant hit, despite a $12.50 price tag. Every issue sold out. The Babe Ruth Classic card climbed to six times IPO and would not sell below $40.00. Ty Cobb followed suit and most of the Classics initially sold for more than the IPO.

It seemed as if Topps had a runaway hit on its hands. With most of the IPOs selling out, and those sellouts in turn bringing in immediate profits for their owners, it looked like the eTopps dream had become a reality. Brand new cards were considered instant collector's items because of their scarcity and quality. But would this really last forever? Was this really the model for the future? Could everything be profitable?

eTopps next unveiled an innovative system that allowed eTopps collectors to choose the final 13 cards in the 2002 baseball set. Collectors went to the eTopps message boards to campaign for their favorite players and cartels formed where collectors pooled their votes to ensure the inclusion of certain cards in the set. The results of the "Pick 'Em" vote were: Mark Prior (14,662 votes), Rickey Henderson (8,494), Austin Kearns (8,289), Tom Glavine (5,824), Manny Ramirez (5,351), Shea Hillenbrand (5,097), Junior Spivey (4,954), Derek Lowe (4,944), Torii Hunter (4,817), Juan Rivera (4,698), Eric Hinske (4,688), Bobby Hill (4,688), Rafael Soriano (4,687), Jim Edmonds (4,687).

The introduction of the Mark Prior card brought the problem of multiple accounts to the forefront. With no limits being enforced by eTopps, many collectors opened a number of additional eTopps accounts in order to get more Prior cards. It worked. Despite each account being limited to one Prior card due to excess demand, some collectors walked away with more than twenty thanks to multiple accounts. The presence of multiple accounts was a growing problem that eTopps would soon have to deal with.

But how many Priors were people picking up on eBay? eTopps enthusiast Jason Barden created the original eTopps price guide which tracked each card's price movement in detail and published buyer and seller data for each card. eTopps had it's equivalent of the SEC. Finally, statistics pertaining to the quantity of each card a collector has bought and sold was available to the general public. The guide was a favorite of the eTopps message board participants despite the fact that it seemed no one could remember the web site address! That's what bookmarks are for...

Soon after the All-Star game, talk turned to the labor problems in baseball. eTopps also slowed the release of cards by only releasing Classics, and an eVent card. eVent cards were released to commemorate significant milestones in the world of sports. Their novelty drew significant collector interest initially but they soon tumbled far and fast. Oftentimes, the player featured on the card was not particularly popular and demand could not keep up with the large supply. eTopps finally started printing eVent cards to order in an effort to market the cards only to collectors. This discouraged flippers from ordering the eVent cards and led to more manageable print runs for them.

eTopps collectors dodged a bullet when the racehorse "War Emblem" failed to win the Triple Crown. eTopps was apparently planning an eVent card to commemorate the achievement. By accident, eTopps collectors were e-mailed an announcement of the card's release. Collectors soon received a retraction e-mail explaining the error. Most eTopps collectors agree that if the horse had won and the card had been released it would be the worst-performing eTopps card of all-time.

With the dearth of new IPOs, eTopps hoped to allow the secondary market to "catch up". The aim was to keep eTopps cards from becoming too common. But with a possible strike in Major League Baseball on the horizon the issues began to slide. If you had not sold since IPO, there were still profits to be had, but the premium that had previously been placed on the cards waned.

When baseball was able to avoid a strike, there was a brief rally in baseball as people collected the cards that they thought would either be more collectable, or were certain to meet their performance bonus. Prices were still good, but savvy investors were beginning to notice a disturbing southward trend.

In the next installment, we'll look at what happened when football season rolled around and the Rewards Program was introduced. We'll also investigate the question, "What is Next for eTopps?" This we like to call "Back to Life, Back to Reality..."

Part 1 - "The Few, The Proud, The eTopps Collectors..."

Part 3 - "Reality Bites…"