By Shelley Souza, Optionetics.com 9/3/2002 9:00:00 AM

I was not surprised to read online yesterday that skateboarding is a multi-billion dollar business. When I stayed with my cousin recently in Western Canada *, she told me that her teenage son can sometimes go through a skateboard in a week. I was surprised by that, and not surprised: seeing the tricks skaters do, it’s a wonder the boards last even a week. But it does beg the question: why haven’t board manufacturers begun making skateboards more durable? Money is a factor, in that they (the manufacturers) get more of it as skateboards use the laws of physics to torque against a human body flying through the air or navigating surfaces suspiciously antithetical to the nature of wood and wheels *. But the other side of the money equation is the consumer. As my cousin said, it’s a very expensive sport. At $60-$100 a board, it’s not an activity she can afford to support indefinitely, even though her son is an extraordinary skater. He gave up his bedroom to me while I was there; one wall was covered with The Gathering, Magic game cards, but the rest were covered with magazine photographs of skaters and equipment ads. I became aware during my visit that skateboarding is a much bigger industry than I had imagined.

In a circuitous manner, I arrived at an article about skateboarding (again) yesterday when I was doing a little research on Barnes and Noble (BKS). I had seen one recommendation by an analyst last week to buy the stock, and every time I go into my local store, it seems to be packed with browsers and buyers. But today I was reading the Zacks report on reasons to sell the Barnes and Noble stock right now. The primary one being that even though the company posted a gain of 2 cents a share in its second quarter, compared to a loss of 3 cents in the same quarter the previous year, it missed its forecast by 8 cents, which Zacks said “is never a good sign.” The report added that there is reason for investors to be optimistic in the future but that they should wait for the company’s earnings to show real positive results before investing.

As for skateboarding, I’m not sure about a way for investors to cash in on the two-point-something billion dollars industry, still in many ways in its infancy as a recognized extreme sport, despite skateboards having been around in their present form (sort of) since 1959. To my knowledge, there’s no direct way to invest in the sport at this time although some of the sport’s gear, like shoes, is made by publicly traded companies like Nike * (NKE), for instance. But the article I read, courtesy of the Orange County * Register and Knight Ridder, was actually about a skateboarding video magazine (a v-zine, perhaps?), called 411 Video Magazine *, which some followers call the skater’s bible, the piece said. That’s what caught my eye. The video magazine has recently been taken up by Best Buy, Tower Records and Sam Goody; they’re hoping for Barnes and Noble.

That got me thinking: imagine all those skateboarders hunched over the magazine racks in Barnes and Noble doing the occasional ollie (basically a jump, or aerial movement, in which the board remains flush with the skater’s feet, created in 1978 by Alf Gelfand), or flying high over free-standing book cases. Would they create new tricks to fit the different book sections—the Science Fantasy Flip Toe-Heel Twist, or perhaps the Russian Roulette Roller over the Russian fiction section? Would the fact of being in Barnes and Noble encourage street skaters to spend more time reading (and thus generate even more income for the mega bookstore company)?

According to the history of skateboarding * online at interlog.com, many of the pro skaters since the eighties have been branching out and creating boutique skate equipment companies. By and large, skateboarding, despite its waves of popularity, remains an underground sport (until it becomes part of the Olympics, as snowboarding has, I guess?). It’s this underground cult factor that holds it back from being big business, as in a publicly tradable entity. But skaters have to wear clothes and shoes, and skateboard manufacturers have to use timber and steel. Investors who are interested in pursuing this potential niche of strong risk to reward (the same risk to reward factor is true for the skaters as well) may find that there are ways to covertly invest in the sport by seeking out publicly traded clothing retail and hardware companies that supply the skateboarding industry. At any rate, it was something to think about on a rainy Labor Day holiday when the markets were closed and sensible skaters were home treating their boards, although sensible skaters is probably an oxymoron, at best, when one considers we’re talking about people defying gravity (and seemingly the laws of physics) with a length of wood on wheels.

As always, trade carefully.

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