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The Most Expensive Beanie Baby (Gwen Moritz Editor’s Note)

4 min read

Disclaimer: I lost $18 at Oaklawn in 1979, and I’m still not over it. The misery of getting nothing for something taught me that I’m not a gambler. I don’t buy lottery tickets, and I don’t invest in individual stocks. I’m not trading dollars for any cryptocurrencies.

It should be self-evident, then, that I’m not buying any nonfungible tokens, and wouldn’t even if I was sure I understood exactly what NFTs are.

Last week’s issue of Arkansas Business was devoted mainly to our annual celebration of young business and community leaders, the 40 Under 40. But I hope you also took note of Senior Editor Mark Friedman’s article on NFTs, which he described as “digital collector’s items.”

An Arkansan who uses the screen name SIO paid $14 for five short video clips — including a 3-point shot by Los Angeles Lakers star LeBron James — and sold them all less than two weeks later at a profit of almost $2,400. (We agreed to protect this investor’s name because he works in the financial industry and isn’t supposed to make public statements about financial matters.) In some way that, like cryptocurrency, depends on blockchain technology, these NFTs are unique, even though the very same digital images exist elsewhere and can be copied an infinite number of times.

It’s been explained to me — by my 20-something son who works in IT and in Friedman’s story and in other articles that I’ve read on the topic — that owning one of these digital assets is like owning an original artwork, even though images of the original can be made. And maybe that makes sense to digital natives, but it doesn’t to me. As long as people have eyes and appreciate beauty, talent and technique, an original artwork will be a joy forever. But being able to watch LeBron shoot is not the same as owning his actual shot. It’s not even like owning an autograph or a game ball.

What’s more — as Bryan Routledge, an associate professor of finance at Carnegie Mellon University in Pittsburgh, told Friedman — the digital file format the art is on may not be compatible with technology a few years from now. If you found some 5.25-inch floppy disks in a drawer, where would you even start to find a drive that would read them?

None of this matters, of course, because NFTs — like anything else — are worth what someone is willing to pay for them. And someone (or some group of people) thought a “digital collage” by an artist known as Beeple (real name: Mike Winkelmann) was worth $69.35 million.

Now, that might have been a good investment, although I doubt it will ever match SIO’s 17,000% ROI. But the buyers might also join the sad club that includes the buyer of the most expensive Beanie Baby. In the immortal words of Johnny Allison, chairman and CEO of Home BancShares, “Someone’s going to be the last person on the chain letter.” Allison was talking specifically, back in 2004, about banks rushing to get in on the action in northwest Arkansas, but his point applies to every trend that has bubble potential. And even though — or maybe because — I don’t fully understand them, NFTs seem super bubbly to me. When I lost $18 at Oaklawn — 68 inflation-adjusted dollars — at least I knew the odds.


How about those early Bitcoin miners who lost their passwords? Here’s the horrifying start of a New York Times article from January: “Stefan Thomas, a German-born programmer living in San Francisco, has two guesses left to figure out a password that is worth, as of this week, about $220 million.”

What investors were willing to pay for bitcoins took a hit last week, as the Treasury Department said it was going to start paying closer attention to cryptocurrency transactions. I’m preparing for some unaccustomed inflation, what with trillions of borrowed dollars sloshing around in our economy and workers having more negotiating power as businesses crank back up for post-pandemic life, but cryptocurrency is just too unstable for me.


The only time I wanted to invest in an individual stock was when Dillard’s Inc. shares were trading below $4 back in 2008. (I didn’t because it would have been unethical for me to invest in a company that we cover.) Those shares were worth $130 last week, but I probably would have happily sold at $10.


Gwen Moritz is the editor of Arkansas Business.
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