RallyRd - that old idea about partial ownership of comics is a reality (updated July 21, 2021) 6 6

[sfcityduck]

4 hours ago, valiantman said:

  Big books for small players has always been an opportunity... a big one.

This is not big books for small players.  As far as I can tell, and feel free to correct me, this is somebody buying a comic for $X, then selling fractional shares in that comic.  Which means that they are likely making their money by overly agressively pricing the IPO of the comic or are retaining an interest and basically finding underwriters to take on their initial investment so their share is "house money."  I really don't like this model at all.  And I'm not impressed by their offerings.  I would not do this until I have gone through their prospectus with a fine tooth comb.  Meanwhile, my 17 year old kid turned has turned $3,500 into $13,500 in a month by investing in Covid-19 vaccine company stock options, and just bought his first contract for Amazon options.  Demonstrating that if you want to play securities, which is what this is, not owning comic books, there are far more lucractive ways to make money that might actually put you into the position to buy outright the comic that you think is a good fractional share investment.

At the very least, get back to me when then these guys sell one of these comics and can show a return for the investors so we can compare their performance with securities investments. 

[Gatsby77]

14 minutes ago, sfcityduck said:

This is not big books for small players.  As far as I can tell, and feel free to correct me, this is somebody buying a comic for $X, then selling fractional shares in that comic.  Which means that they are likely making their money by overly agressively pricing the IPO of the comic or are retaining an interest and basically finding underwriters to take on their initial investment so their share is "house money."  I really don't like this model at all.  And I'm not impressed by their offerings.  I would not do this until I have gone through their prospectus with a fine tooth comb.  Meanwhile, my 17 year old kid turned has turned $3,500 into $13,500 in a month by investing in Covid-19 vaccine company stock options, and just bought his first contract for Amazon options.  Demonstrating that if you want to play securities, which is what this is, not owning comic books, there are far more lucractive ways to make money that might actually put you into the position to buy outright the comic that you think is a good fractional share investment.

At the very least, get back to me when then these guys sell one of these comics and can show a return for the investors so we can compare their performance with securities investments. 

Amen!

And if I *did* want to own a fractional share of a cool book like Captain America # 3 or Radioactive Man # 1, I certainly wouldn't want to pay $120 for just $100 in equity, although I guess that's one way to minimize your capital gains tax hit when you try to sell your shares later.

Edited July 25, 2020 by Gatsby77

[Kon_Jelly]

1 hour ago, valiantman said:

I have a $100 CGC 9.8 Action Comics #1 reprint.  I have a worthless Action Comics #1 reprint reader copy.  What I don't have is any ownership (even a tiny fraction) in a real copy of Action Comics #1.  I'd settle for a legal document that says I own 0.01% of the real thing and I wouldn't be missing out on anything. I can read a reprint. I have a reprint slab to hold... and I'd actually own part of the real thing.  There would be no downside.

Seems to me there is quite a bit of downside. 

This sounds similar to the companies selling plots of land on the moon - you buy a piece of paper that says you have something that you don't in fact have at all. Then if you actually tell anyone that you bought a fraction of a comic book and they'll think you're insane. 

[D84]

So, this company wants me to subsidize their collection? 🤬 them in the 🤬.

[Gatsby77]

This also feels like a ponzi scheme - maybe not precisely, but in the sense that the pool of buyers who come to realize it's stupid to overpay by 20-40% should be finite (then again, Mile High Comics is still in business, so maybe not). Point is...eventually they'll run out of suckers for new IPO issues, right?

Here's an example:

ASM 300 in CGC 9.8.

By virtue of the ginormous number of slabbed copies, and large annual sales numbers, GPA for this book is generally really accurate, and the book is incredibly liquid.

90-day GPA is $2,300 across 19 sales.

So would I buy a copy for $2450 ($2,300 sales price plus tax and shipping) and then "sell" it a week later for $3,000 (100 shares at $30 per)?

Absolutely.

That's a 22% gross return in a week.

Even better if I retain a 60% ownership in the book.

So...I hold back 60 of the shares and sell the remaining 40.

Bam! 

I've raised $1,200 from others, pay only $1,250 for a book worth $2,300 and still retain 60% ownership, meaning I have near total control on when/if to sell.

Plus, since the book is a separate business entity unto itself, if the value collapses, it can simply go "bankrupt," in which case my investors are entitled to only a small percentage of the nominal share value anyway.

It's 2023. Venom 2 movie never gets released, ASM 300 in 9.8 collapses to just $900 and is sold for $850 net of fees. The share price has dropped from $30 to $8.50.

But...because this particular book has also gone "bankrupt," the shareholders have to settle for only a portion of the full value - so instead of collectively owing them $340 (40% of the market cap / full sale value), I only owe them say...30% of that amount, or $102.

I, meanwhile, retain my 60% shares at full value - thus netting $510 from the $850 sale.

Yes - I've lost money -- I paid $1250 for a 9.8 copy of ASM 300 and sold it for just $510 - a loss of just $740. 

Whereas had I bought it for the full GPA of $2,300 to begin with, I'd have lost $1,450.

But that's on the long-tail chance that the value of the book utterly collapses.by more than 60%.

 

All of this roles up to an ingenious form of hedging - you maximize your upside (by getting a great book at only 50% of the cost while retaining controlling and physical ownership) while greatly minimizing your downside (because you could allow the entity to go bankrupt if necessary).

Cool way to profit from other people's money, if you can.

Edited July 25, 2020 by Gatsby77

[DJones]

8 hours ago, blazingbob said:

Comic default swaps are coming.  

[KCOComics]

What fun is owning key comics if you can't hold them and look at them? 

I get 99.9% of us will never have a shot at Detective 27, but I don't understand how owning 1 / 1000th of it and never seeing it in person, is any better?  Will they at least send you a picture?   

Like when you adopt a whale and try to convince your kids the whale is their pet, but they can never see, touch or play with it? 

[valiantman]

1 hour ago, Kon_Jelly said:

Seems to me there is quite a bit of downside. 

This sounds similar to the companies selling plots of land on the moon - you buy a piece of paper that says you have something that you don't in fact have at all. Then if you actually tell anyone that you bought a fraction of a comic book and they'll think you're insane. 

Except that you actually own a share of Action Comics #1.  It has a CGC serial number, you have a legal document showing your fractional ownership, and the book exists right here on Earth.  There's no "for entertainment purposes only" fine print like owning the moon or a star.  You get yourself a cheap reprint and know you also own a piece of the real thing.  Prove it?  Sure, let me log into my account.  Wait!  That's how you know you own stocks!  No difference.

Edited July 25, 2020 by valiantman

[valiantman]

35 minutes ago, Gatsby77 said:

Cool way to profit from other people's money, if you can.

So is every single stock sale or options exercise.  Every winner has someone else paying the profit.  Someone else loses for everyone who wins in any investment.  The difference is, stocks and companies don't give anyone a kick in the nostalgia dopamine center.

[valiantman]

33 minutes ago, KCOComics said:

What fun is owning key comics if you can't hold them and look at them? 

I get 99.9% of us will never have a shot at Detective 27, but I don't understand how owning 1 / 1000th of it and never seeing it in person, is any better?

99.9% of us will never have a shot at taking a company public on the stock market, but 100% of us understand that buying stock in a company of our choosing is an option we have.  You think there's more reason to own stock (usually 0.00000001% of a company, or less) than owning 0.1% of a comic book we couldn't possible afford outright?  What website is this?

Some of you seem to have forgotten that this is a website for CGC graded comic books and the best ones in existence are far beyond any of our ability to purchase... so we either keeing spending $1,000 on the "4,357th best comic", since we can afford it, or we could spend $1,000 on the best comics in existence if such a system existed.

I can't wait to own a piece of a real Action Comics #1, and I'll gladly sell a CGC graded complete copy of Action Comics #21 to do it.  Best > 21st best

Edited July 25, 2020 by valiantman

[Gatsby77]

1 minute ago, valiantman said:

99.9% of us will never have a shot at taking a company public on the stock market, but 100% of us understand that buying stock in a company of our choosing is an option we have.  You think there's more value in owning stock (usually 0.00000001% of a company, or less) than owning 0.1% of a comic book we couldn't possible afford outright?

Some of you seem to have forgotten that this is a website for CGC graded comic books and the best ones in existence are far beyond any of our ability to purchase... so we either keeing spending $1,000 on the "4,357th best comic", since we can afford it, or we could spend $1,000 on the best comics in existence if such a system existed.

I can't wait to own a piece of a real Action Comics #1, and I'll gladly sell a CGC graded complete copy of Action Comics #21 to do it.  Best > 21st best

Taking your rationale to a logical conclusion, this is why I don't understand the market for single "pages" of Action 1 or Detective 27.

Ooooh...I can't afford the real thing, let me by an "NG" slabbed copy of Detective Comics # 27, page 9 instead!

 

Full disclosure: I have one of these books, but it's a coverless copy of Sensation Comics 1 with a color repro cover and centerfold that I bought here on the boards from Sharon 9 years ago. Dopamine hit?

Sure.

But I think you also underestimate the dopamine hit some of us get from looking at our stock portfolios, too.

[valiantman]

1 minute ago, Gatsby77 said:

But I think you also underestimate the dopamine hit some of us get from looking at our stock portfolios, too.

That's why I called it the "nostalgia dopamine center".  What "nostalgia" is associated with your stock portfolio?

"Check out these 50 shares I have in ABC.  I remember when I was just a kid, dreaming about owning 0.00000001% of their raw materials plant in Sheboyganville, and now look at me --- I own 0.00000002%.  Sorry, it gets me a little weepy, but these are happy tears."

[oldmilwaukee6er]

What about Sunday!?

[valiantman]

It's funny to me that a bunch of guys on the official CGC board are opposed to the idea that "someone could own a part of a high-valued comic book" while simultaneously supporting CGC... the idea that "comics should be sealed up in a slab and not read." 

Of the two concepts... ownership in part of something bigger is the one that makes more sense, and we're already 5,000,000 slabs into the dumber of these two ideas. 

Edited July 25, 2020 by valiantman

[valiantman]

Picture it, Earth, 1996...

"What if there was a world-wide-website where you could list something of yours for sale, let other people bid up the price like an auction, and then you just ship the stuff to them after they pay you?"

That would never work.  People aren't going to pay for something based on a picture from someone they'll never meet and just hope the item shows up.  You think I'm going to drive over to the Post Office, trade cash for money orders, and send them away in the mail to some random address on the other side of the country and cross my fingers hoping I get something cool two weeks later?  What kind of fool do you think I am?

And thankfully, those beautiful words of genius stopped whatever ridiculousness would have come next, and that thing known as "Ebay" never actually happened.  It is a mass hallucination.

Thank you, oh brilliant minds of the internet for your words of warning and wisdom.  You've saved us all from foolishness so many times.

RallyRd is doomed.

[jaybuck43]

5 minutes ago, valiantman said:

99.9% of us will never have a shot at taking a company public on the stock market, but 100% of us understand that buying stock in a company of our choosing is an option we have.  You think there's more value in owning stock (usually 0.00000001% of a company, or less) than owning 0.1% of a comic book we couldn't possible afford outright?

Some of you seem to have forgotten that this is a website for CGC graded comic books and the best ones in existence are far beyond any of our ability to purchase... so we either keeing spending $1,000 on the "4,357th best comic", since we can afford it, or we could spend $1,000 on the best comics in existence if such a system existed.

I can't wait to own a piece of a real Action Comics #1, and I'll gladly sell a CGC graded complete copy of Action Comics #21 to do it.  Best > 21st best

Thought exercise for you.  Aymen decides he's tired of owning both of the best copies in the world of Action #1.  He decides to sell it at auction (let's say he has Vincent do it).  The last time he bought the book it sold for $3.2 million.  But now, he's no longer in the bidding.  Rally steps in and acquires the book at auction (again lets say for $3 million)   Now first of all (as we've already seen) Rally is not going to put it up for fractional ownership at $3 million.  They are going to market cap it at a premium and that's their profit.  So lets assume a healthy 30% profit for the company, they will set the market cap at $3.9 million and sell 100,000 shares in the company.  So you can own 1/100,000th of the best copy of Action #1 for the low low price of $39.  What exactly does that get you?  A piece of paper with a serial number on it?  Cool I guess.  But the value should be pretty static.  It's a highly illiquid book.  Price discovery has been done (we know what it's worth).  And the "market" is underwater from day one.  So after the 90 day period, why would someone want to buy my share at >$39?  so that they can say THEY own a fractional piece of a comic book?  One of the wisest things Forumite of the Year @delekkerste ever said was there is no enjoyment in having to explain to friends and family why you paid millions of dollars for a piece of art.  If it's not "known" then why bother?  ("Well you have to understand, the artists use of blah blah blah shows  ")  But if I say "It's a Banksy" they just go O yea I know that name.  So if I pull out a copy of action #1 and show it to you your jaw drops.  If I pull out a certificate that says "you own 1/100,000th of a company that owns an action 1" they will look at me and go ... And?  So it doesn't have the "wow" factor and it doesn't have the value appreciation potential.  

[Kon_Jelly]

38 minutes ago, valiantman said:

Except that you actually own a share of Action Comics #1.  It has a CGC serial number, you have a legal document showing your fractional ownership, and the book exists right here on Earth.  There's no "for entertainment purposes only" fine print like owning the moon or a star.  You get yourself a cheap reprint and know you also own a piece of the real thing.  Prove it?  Sure, let me log into my account.  Wait!  That's how you know you own stocks!  No difference.

Sure, but I meant it from a purely practical matter. The reason you'd want to own a fraction of Action Comics 1 is the same reason you'd want to own a plot of land on the moon. You can't hold the comic in your hand just like you can't visit your moon property, but you can show someone a piece of paper that says it's real. Emotionally it's the same thing, and it's a bit nutty.

And if you take that side out of it you're just looking at a bad investment opportunity. 

[KCOComics]

2 minutes ago, valiantman said:

It's funny to me that a bunch of guys on the official CGC board are opposed to the idea that "someone could own a part of a high-valued comic book" while simultaneously supporting CGC... the idea that "comics should be sealed up in a slab and not read." 

 

Oh trust me,  I get the hypocrisy.  And I'm guilty of it. All my bigger books are slabbed, but I still own them. 

I've always said there is a difference between investing and collecting comics.  I love investing.  It's one of my interests. But I don't consider comics part of investing. Comics are a fun hobby. A happy distraction.  

This turns comic book collecting into nothing more than investing,  only you have far less control of your investment.  If my goal is to grow $$, there are other vehicles I would choose. If my goal is to collect comics, I want to own them, hold them,  look at them, and talk about them with my kids. That's the joy of collecting.

 

And look,  AC1 and Tec 27 have never been a reality for me.  They were priced out before I was born.  So they just aren't apart of my collecting goals.  I'm content with that.  

[valiantman]

Just now, jaybuck43 said:

Thought exercise for you.  Aymen decides he's tired of owning both of the best copies in the world of Action #1.  He decides to sell it at auction (let's say he has Vincent do it).  The last time he bought the book it sold for $3.2 million.  But now, he's no longer in the bidding.  Rally steps in and acquires the book at auction (again lets say for $3 million)   Now first of all (as we've already seen) Rally is not going to put it up for fractional ownership at $3 million.  They are going to market cap it at a premium and that's their profit.  So lets assume a healthy 30% profit for the company, they will set the market cap at $3.9 million and sell 100,000 shares in the company.  So you can own 1/100,000th of the best copy of Action #1 for the low low price of $39.  What exactly does that get you?  A piece of paper with a serial number on it?  Cool I guess.  But the value should be pretty static.  It's a highly illiquid book.  Price discovery has been done (we know what it's worth).  And the "market" is underwater from day one.  So after the 90 day period, why would someone want to buy my share at >$39?  so that they can say THEY own a fractional piece of a comic book?  One of the wisest things Forumite of the Year @delekkerste ever said was there is no enjoyment in having to explain to friends and family why you paid millions of dollars for a piece of art.  If it's not "known" then why bother?  ("Well you have to understand, the artists use of blah blah blah shows  ")  But if I say "It's a Banksy" they just go O yea I know that name.  So if I pull out a copy of action #1 and show it to you your jaw drops.  If I pull out a certificate that says "you own 1/100,000th of a company that owns an action 1" they will look at me and go ... And?  So it doesn't have the "wow" factor and it doesn't have the value appreciation potential.  

Those $39 shares would be $50 by the end of the week on a 24/7 digital exchange.  $1,000 worth of modern variants would be worth $10 overnight if there was a way to put that $1,000 into the best copy of Action Comics #1 thus far instead.

Do you know why people are so focused on the stock price instead of the market capitalization?  Because they think stock price = company value. 

$39 for shares of Action Comics #1 or $1,000 for Spider-Man #985 Ribbidy-bop Variant?  No brainer, I'll take 25 shares of Action Comics #1, and a case of soda, please.

[KCOComics]

6 minutes ago, valiantman said:

 

RallyRd is doomed.

I'm not sure who you are so angry at. 

In any event,  I never said it was doomed. I'm more concerned that it may be successful and further inflate prices on key books. 

Yes,  it will increase the value of my collection, but it will also put books I'd like to own 1 day (AF15 for example) further out of reach. 

 

And let's be clear,  this isn't collecting. It's investing. Some guys invest in comics today. I have no issue with that.  It's just not for me.