Kobe Bryant Gains 3,233% From His 4-Year Investment In Sports Drink Company

In 2014, retired 5-time NBA-champion Kobe Bryant invested approximately $6 million to own roughly 10 percent of sports drink company, BODYARMOR (a valuation of $60 million.) The company generated $10 million revenue in 2013, implying that Bryant paid a premium of 6X revenues. Considering sales doubled in 2012 and again in 2013, the growth valuation appeared to be justifiable, especially since the product was relatively new and responsive to marketing.

By the end of 2018, BODYARMOR’s revenues clocked over $400 million–forty times more than what they were in 2013. In August that year, Coca-Cola bought a minority stake in the company for $2 billion, which reportedly turned Kobe’s $6 million investment into $200 million. That’s a gain of 3,233%, or more than 33 times his original investment in just four years.

To put that into scale for the average American, that’s the equivalent of turning $10,000 to $330,000 in just four years–an average of $80,000 in gains per year.

BODYARMOR sports drink

Photo Credit: The Nutritionist Reviews

This story is a real life example of how investing in young, growing companies is superior to day trading or buying mature companies at expensive valuations. It also goes to show that you don’t have to be a professional investor with robust financial credentials to save your money and keep your eyes open for great investing opportunities.

The takeaway here, for traders, is that trading for the short term is vastly inferior to the potential gains of a long term value-growth strategy. Even if your trading is profitable, there are virtually zero opportunities to make 30X your money in a single day without taking extreme risks and having a ton of luck. In history, I can only think of one extraordinary example off the top of my head where this has happened in a justified manner: Gateway Industries; and if you spend some time studying the circumstances around its meteoric price increase, you would quickly conclude that you probably wouldn’t have been able to predict the event, let alone participate in it.

In contrast, Kobe Bryant’s 33X investment is replicable. Although not risk-free, the results were foreseeable. Bryant had come across a company with a compelling product, a large runway for growth, and a sustainable business model. He bought a stake at a reasonable price, and held it for the long term. As you can see, it doesn’t have to take 20 years to get a great return on a business; for Kobe Bryant, it only took 4 years.

Be patient and invest wisely for the long term, and you’ll find that not only will you make more money, but you’ll also have more time to live your life–whether it’s playing basketball like Kobe Bryant or spending time with your family and friends, learning new skills, and pursuing other ventures that bring value to others.

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