The market price impact of an injury

Disclaimer: it's stronger than expected

Hi, I’m tecomah, I publish every two weeks a data analysis about a specific topic related to Sorare. We all fear the injuries of our players as S05 managers, and I’ll describe in this article the market dynamics that follow these events. You’ll see that what is bad news for you can become very good news for some traders.

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Methodology

We analyzed 60+ injuries from the last months, gathering different data points:

• Date of the injury

• Market price (Rare + Limited when relevant) before the injury

• Recovery time

• Games missed

• Bottom market price

• Bottom market price date

Market price data is taken from SorareData and injuries dates from Transfermarkt (example).

Modelization

Let’s start from an example: the recent injury of Mike Maignan:

Data from Transfermarkt

The shape of the drop is rarely linear: most of the time we observe an abrupt drop, followed by a plateau until the market price progressively increases again.

We can make a schema out of this observation:

In order to simplify the analysis, we’ll analyze two different phases:

• The drop

• The price recovery

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I) The Drop

Here we analyze the price drop on rare cards, based on the number of missed games.

We observe a clear logarithmic trend:

• For players that miss 5 to 10 games, we observe a 20%-50% price drop.

• For players that miss 30+ games, we observe a 70%-80% price drop.

We observe a reduced price drop for a group of players, that I named “Stars”.

• They all either have a very high S05 Value (Kalidou Koulibaly, Gerard Moreno), or a high speculative value (Federico Valverde, Francisco Conceiçao). See my article How to value a Sorare Card to understand the difference.

It’s the opposite for the group I called “Tier 3” players: Despite missing only 10-15 games, their market price dropped sometimes by more than 70%.

• These players share some similarities: they are already quite old and are average scorers. They do not hold any speculative value, nor collectible value. The recovery uncertainty around these players is also higher, which probably explains why they are sold off when they face an injury.

Do we observe the same phenomenon for Limited Cards?

Disclaimer: I am totally shocked by the results.

We observe a 2x price drop on Limited cards after an injury compared to rare cards

Here are my possible explanations, but I’d like to hear yours in the comments:

• Higher market liquidity: Rare cards holders are more likely to hold the cards of their injured players, or won’t offer discounts.

• Increased price volatility of Limited Cards. This scarcity is quite new and suffered a drop in late 2021. Many of the injuries that are analyzed overlap with this period.

• Some intuition I have but I would need to prove with data: the Limited market looks shorter-term than the Rare market. Consequently, injuries and suspensions affect significantly more prices.

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II) When do prices start recovering?

Now that we have approximated the price drop of a card following an injury, let’s focus on the price recovery.

We compiled data for injuries that lasted less than 90 days.

• The red line represents the day of the injury

• The arrow represents the day when the market price hit rock bottom

• The green point represents the moment the player played again.

There’s no obvious relation between the duration of an injury and the delay before price recovery:

• There’s a group of players for whom the bottom price is reached only a few days after the injury. This phenomenon seems to happen for Star players: Altay Bayindir, Neymar, Paulo Dybala, Raphaël Varane.

• Most of the time the bottom price is reached at least 10/15 days before the return from injury. It coincides with the average delay between a player's return to training, and his return to competition. The information of a player’s return to training is frequently shared on clubs’ social media.

• The price bottom day rarely matches between Limited and Rares: another proof that there are two very different market dynamics.

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  Conclusion

  It was a difficult topic to analyze due to the few numbers of injuries and the difficulty to collect data. Yet there are many insights:

• First, I was not expecting such price movements. In a matter of a few weeks, a card can lose 50% of its value and then recover.

• Second, I was expecting more homogeneous price movements between players. For a 2-month injury, top players’ prices usually drop by 25%, while it can drop by 75% for Tier 3 players.

• Lastly, price drops are way stronger on the Limited market, which is a very surprising phenomenon.
  
  I’ll follow closely the market evolution regarding this topic. To do so, I decided to test an injury trading strategy on Limited. Let’s see the results in a few months.

  

  

  All market prices were taken from SorareData. This is absolutely amazing to see a free tool providing such value. Thanks again!

  If you like this article, please help us spread the word on Twitter, where you can also contact me directly for any questions.