Note from Your Editor
Often large investing insights and knowledge come from very small pieces of information. For example, I guessed Theranos was most likely a fraud in the very early innings of scrutiny. This hunch was not based on the amazing investigative work by John Carreyrou, but rather on the fact that a Theranos employees who I knew was pictured in a NY Times article wearing a lab coat performing “sophisticated experiments and blood tests”. The last time I saw this person was in college, where he headbutted someone and proceeded to shotgun a beer. Needless to say, he was also not an engineering or science major nor any sort of doctor. After that NY Times article, I was always very skeptical of the company. We have demonstrated in countless articles that small clues can be helpful in the investing process and are very repeatable, and soon we hope more analysts will use these tools more in the research process.
We have written about tracking online orders using incremental order numbers before in our Footlocker article. Today we are estimating sales of the new $495 Big Baller Brand Shoe, the ZO2, using a slightly different technique.
Big Baller's loose! If you can't afford the ZO2'S, you're NOT a BIG BALLER! 💰— Lavar Ball (@Lavarbigballer) May 4, 2017
There have been numerous media reports that over 5000 pairs of the new $495 Z02 shoes have sold in the first week, which was fueled by simply looking at the incremental order numbers displayed from Shopify receipts. Similar to the order by The Game, shown below:
Shopify orders are indeed incremental, however there are a few problems with this approach. The first is that the website has been up for a while selling other apparel and many order numbers were for previously purchased shorts and shirts (Shopify order numbers usually begin at 1001, as we believe it did in this case, but this initial number can be changed to look higher). Nice Kicks performed a similar analysis as we are back to show, and they confirm that the first pair was bough with an approximate order number of 4384 vs an approximate number of 5300 now, so roughly 1000 orders have been made since the shoes debuted. However, these order could have been for anything listed on this site i.e. shorts, shirts, etc. and therefore it is difficult to estimate average value.
Shopify does show inventory levels and variant information publicly for stores which have not opened in the last six months via the product.json information. Additional information for a specific product can be found at product/product-handle.json.
The relevant json endpoints are shown below:
A screenshot of some of the json is shown below, you can see for this size 8 the inventory is -10, implying 11 pairs have sold:
Initial inventories for these product variants (sizes) were set at one and allowed to go negative, therefore counting the difference from 1 gives us the total amount of orders so far. To calculate the number of sales for an individual size, subtract the inventory_quantity from 1. You can check these in realtime to calculate new totals for yourself, but current sales are as follows:
ZO2: WET- ‘The Autograph’ - By Lonzo Ball ($995): Total pairs sold 121
ZO2: PRIME by Lonzo Ball ($495): Total pairs sold 333. Interestingly there have been 108 pairs sold of size 8.5, not sure if someone actually bought 100 pairs or fat-fingered an order.
ZO2: THE SIGNATURE SLIDES by Lonzo Ball ($220): Total pairs sold 41
Total estimated sales of footwear: $294,250. Not horrible in roughly a week to be honest. However, we are continuously amazed at how much interesting financial information can be inferred from public data and continue to see the processes and tools that Volmanac uses as very valuable and underutilized in the investing process (even if not demonstrated on a large public equity in this example).
Despite the outlandish comments by Lavar and the high prices on the shoes, we hope it works out for BBB, we know firsthand how difficult starting a business is and wish the company the best of luck.
You May Also Be Interested In
Lending Club (LC) Loans