The Pellucid Perspective - April 2021 - 2

PHOTO BY SAVANNAH LAKES VILLAGE / UNSPLASH

INDUSTRY EVENTS

Callaway and TopGolf make it to the Altar
Will their Marriage be " One for the Memory Banks " ?
By Stuart Lindsay

W

hen we first wrote about the merger of Callaway and
TopGolf last November, there were a lot of questions. Shares of Callaway fell from $21.41 on October 27th to $15.25 on October 28th. By the time the actual
marriage took place in early March; Callaway shares had more
than rebounded and stand at about $27 as of this writing -
an increase of almost 80% in less than 5 months. Apparently,
there are a lot of investors who think this exciting honeymoon
will lead to longterm wedded bliss.
This runup in Callaway shares has made a some people very
happy. Of the 90 Million shares issued to Topgolf investors
in March, Eric Anderson got almost 21 Million and Thomas
Dundon got over 18 Million. A $7 increase over the deal value
of $19.40 increased their shares by almost $150 Million for
Anderson and about $125 Million for Dundon. Other investors getting the other 50 Million shares are also probably ecstatic.
What's puzzling to me is that in February, Callaway reported a much wider than expected loss for the 4th Quarter of
2020. In a year that saw equipment sales jump along with the
increased demand for golf, there are still some questions. After
all, it is now up to Callaway to figure out how to earn a return

2 The Pellucid Perspective

for their shareholders on not only the investment in TopGolf,
but their overall " market cap " that has exponentially increased
due to shareholder exuberance.
An old friend and long time golf companion sent me a copy
of " One for the Memory Banks " - a touching book by golf industry veteran, Luke Reese. Those of us who have enjoyed the
beauty of " match play " and the growth of friendships both new
and old on golf courses can't help but appreciate the unique
combination of humor, fun and humiliation that are contained
in this book. One could say this great read captures the essence
of " traditional " golf while tracing the path of a beginner being
transformed into an avid, frequent and willing participant. As
an industry, we depend on the 25% of avid golfers for well over
50% of overall golf demand.
As we look at 2021, our big challenge is to sustain the gains
made in 2020. The boom in traditional green grass golf demand will again compete with both alternative golf experiences (TopGolf, Drive Shack and Indoor simulator facilities)
and other activities for leisure time and discretionary income.
Callaway will provide an interesting case study of the dynamics of the relationship between traditional and non-traditional golf activities. While both pre-merger TopGolf and
April 2021



The Pellucid Perspective - April 2021

Table of Contents for the Digital Edition of The Pellucid Perspective - April 2021

TOC
TopGolf/Callaway Marriage: One for the Memory Banks?
Objects in ‘20 Rearview Mirror (Could Be) Better Than They Appear
March GPH stabilizes, where will rounds take us?
Feb Utilization up behind small rounds decline vs. large weather deficit
Cleveland weighs in at #17 in new ranking, puts distance between them and rival Pittsburgh...
13 Activities, Transactions dominate; no closures for 2nd consecutive month
The Pellucid Perspective - April 2021 - TOC
The Pellucid Perspective - April 2021 - TopGolf/Callaway Marriage: One for the Memory Banks?
The Pellucid Perspective - April 2021 - 3
The Pellucid Perspective - April 2021 - 4
The Pellucid Perspective - April 2021 - 5
The Pellucid Perspective - April 2021 - Objects in ‘20 Rearview Mirror (Could Be) Better Than They Appear
The Pellucid Perspective - April 2021 - 7
The Pellucid Perspective - April 2021 - 8
The Pellucid Perspective - April 2021 - 9
The Pellucid Perspective - April 2021 - March GPH stabilizes, where will rounds take us?
The Pellucid Perspective - April 2021 - 11
The Pellucid Perspective - April 2021 - Feb Utilization up behind small rounds decline vs. large weather deficit
The Pellucid Perspective - April 2021 - 13
The Pellucid Perspective - April 2021 - Cleveland weighs in at #17 in new ranking, puts distance between them and rival Pittsburgh...
The Pellucid Perspective - April 2021 - 15
The Pellucid Perspective - April 2021 - 13 Activities, Transactions dominate; no closures for 2nd consecutive month
The Pellucid Perspective - April 2021 - 17
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