Understanding Buyouts in Magic

The singles card market for Magic can be incredibly volatile - just watch any preview season. Most of the time this is due to people speculating on new card interactions. Take a look at Shuko, for example. A card worth barely a dollar for most of its history, all it took was the release of Modern Horizons 3 and Nadu, Winged Wisdom for the price of Shuko to explode. But new developments like this don’t cover all the reasons a card’s price can spike. What about when a card’s price skyrockets without any new interaction or synergy? It’s time to talk about buyouts, what they are, and what sets them apart.

Identifying a Buyout

To put it simply, a buyout occurs when there is a rapid erosion in the supply of a card. This can be due to a variety of different reasons, but ultimately the surface level evidence is the same: a card doesn’t just become popular and have a price swing, but rather its supply drops significantly and quickly. 

Key to a buyout is that the supply drop isn’t brief. Cards are taken off the market faster than they can be replenished, so much so that by the time most people have caught on to a buyout occuring the market price has shifted significantly. Some cards will undoubtedly come back on the market as people discover that an unwanted card in their collection has spiked in price, but this is a gradual uptick which cannot replenish what was taken off-market.

Since buyouts are price movements rooted entirely in supply, this immediately excludes modern-era cards from being candidates. The supply of these cards is simply too big, meaning that a coordinated effort to manipulate their prices is nearly impossible in the long run. The gradual return of supply which occurs post-buyout can happen much quicker with new cards, given the wide pool of market players who may own them, and as such the staying power of a buyout disappears. Older cards, however, are much more susceptible to such movements - both because of their comparably limited supply, as well as the lesser number of people spread out across the market who are likely to already own them. This doesn’t mean only Reserved List cards, but it does prioritize them.

Long-Term Buyouts

Overall, successful buyouts can be categorized depending on the significance of their impact on a card’s price over the long term. So, first and foremost, what is a long-term buyout? 

Long-term buyouts are those which take out a chunk of a card’s supply in one fell swoop and which also successfully hold down the return of supply to market for at least a month after the initial wave of purchasing. The success of restricting the otherwise gradual supply injection can come from one of two reasons: either very few individuals have access to the targeted card in question, meaning that the natural return of supply is held back by the card’s very nature; or the buyout purchasing time frame is extended beyond the initial spike, with the cheapest supply of a card being bought up as it comes to market. 

One infamous example of a successful long-term buyout is Moat. This card was already a few hundred dollars when it was targeted in 2016, but overnight the price doubled as nearly all copies were taken off of TCGPlayer. Supply was incredibly slow to return, thanks in large part to the card’s nature as an old-school Reserved List pick from Legends. While it definitely had a large audience of people demanding the card, it wasn’t played anywhere and as such there was a far smaller group of people who actually had copies to part with after the buyout took hold. The card was just too rare, and the market couldn’t help but reflect that in the new price.

Short-Term Buyouts

Short-term buyouts, by comparison, are those which have a much harder time keeping track of the supply influx after a card has spiked. But make no mistake, just because a buyout is short-term doesn’t mean the price spike induced will disappear completely. It may retrace quicker than a long-term buyout, as is often the case, but not all the way back to pre-buyout levels. 

Short-term buyout cards are usually less well known, cheaper, and newer than their long-term counterparts. The simple reason why this trend exists is that short-term buyout targets often have a larger, more dispersed supply, which causes difficulty when it comes to maintaining the post-buyout influx period.

Buyouts like these are usually a bit more experimental, as they can test the stickiness of a card’s price with less monetary investment. If someone is tempted to test the waters and see how receptive the market would be to a buyout of any kind, then why not start small and observe? That’s the logic with many short-term buyouts, especially during periods when old Magic is otherwise quiet.

A recent example of a short-term buyout is Reparations. Over the course of about two weeks, this Reserved List card from Mirage skyrocketed from around $4 to $32. That’s an incredibly successful price jump, one which has seen plenty of players and collectors cash in on as copies of Reparations have begun to return to the market en-masse. Nowadays, Reparations is roughly $16. This is still a stellar gain, absolutely, but half of the immediate peak of the buyout, a precipitous drop triggered by a mass return of supply.

Wrap Up

Magic’s old card market is pretty quiet right now - far from the buyout glory days of 2016 - but that doesn’t mean this market eccentricity has abandoned us completely. It’s been less than three months since the Reparations buyout, afterall, so who knows what’s next? 

Further Reading:

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