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

[FlyingDonut]

3 minutes ago, blazingbob said:

I own stock in Public Storage which is the company I rent my storage units from.  They are a REIT also.  Difference is I trust Public Storage and see them all over the country.  I don't know RallyRd and their financials at all.

On this I do not disagree with you at all. My point is more about the underlying concept.

[valiantman]

9 minutes ago, Gatsby77 said:

This statement makes me wonder when you started collecting comic books, Greg.

eBay didn't invent mail-order. I was ordering back issues by mail via classified ads in the Comics Buyer's Guide back in 1990. Hell - you could do the same via MileHigh, which had their ads every month in comics (and the classic "Fine/Mint" grade).

Also, did you never experience the rush of running to the mailbox to see if your special "mail-order-only" limited edition Return of the Jedi action figure had arrived (The Emperor, Anakin Skywalker), just "4-6 weeks" after you'd sent in 5 proofs of purchase from other Star Wars figures you'd bought? I was eight years-old, but it was *awesome*!

No, your examples are buying from established businesses who advertised.  Ebay made buying happen where 'buyer pays first' on junk from some random guy's closet to some other random guy's house, by mail, based on an internet description (usually without photos in the 1990s).  That was just a dumb idea when they were talking about it. It became Ebay when they did it.

[valiantman]

FYI, Quidd has made $10,000,000 selling digital collectibles which do not physically exist.

RallyRd is around $400K on actual CGC graded comics worth $5,000+ each, with a couple hundred people involved, so far.

Quidd is the dumber idea.  They've made $10M in 4 years, and counting.

[Gatsby77]

13 minutes ago, valiantman said:

No, your examples are buying from established businesses who advertised.  Ebay made buying happen where 'buyer pays first' on junk from some random guy's closet to some other random guy's house, by mail, based on an internet description (usually without photos in the 1990s).  That was just a dumb idea when they were talking about it. It became Ebay when they did it.

Not at all.

The bulk of ads in the Comic Buyers Guide were from individual collectors, not major dealers -- or only "dealers" in so much as they were running side-hustle mail-order businesses from their homes. And most ads had no photos - just lists of comics, grades, and prices. It was the pre-internet equivalent of buying comics directly from a boardie here, just with less accountability.

Yes - eBay super-charged this idea by making it far easier for *anyone* with an internet connection to sell via a virtual yard sale, but there's a key difference.

I started buying on eBay in 1996, where that fall I bought about a dozen NM copies of Wolverine # 1 (1989). Even as a poor college student, I was thrilled to be able to get them for $12 apiece shipped, whereas just two years earlier they had cost $20 per from my LCS.

And that's the key difference:

When eBay came on the scene, prices fell by 20-40%, benefiting the consumer. Here, Rally Rd. is asking folks to pay 20-40% more for the privilege, benefiting them.

[Sweet Lou 14]

22 minutes ago, Gatsby77 said:

Again - over-paying by 20% is the same whether I pay $12 for something worth $10, or if I pay $120,000 for something worth $100,000.

I agree completely, but one of the quirks of human behavior and decision-making is that it's much easier to get a buyer to overpay by the same percentage when the absolute dollar amount is lower.

I have bought books worth $5 and I've bought books worth $50,000.  I wouldn't even blink at paying $10 for a $5 book (100% overpay) but I would be much more reluctant to pay $55,000 (10% markup) on that $50,000 book.  It will be interesting to see how well the RallyRd business model can exploit this tendency in human behavior, at least in the short term before there's enough of a track record to see how their investors have done on the shares they bought.

[Mercury Man]

Not sure walking around telling someone you own 1/1000th of a Gold or Silver Age comic is anything to thump your chest about.   

Kind of reminds me of Green Bay Packer stock.   It's only available to buy at a certain time, pays no dividends, has no securities law protections, and gives someone a sense of ownership, even though it really isn't.   

If it's a novelty and for fun, then so be it.   I'd rather sink that money into an ETF, Dividend Aristocrat, or the very least, stick it in a piggy bank, and continue to save for 100% ownership of my very own book. 

 

[Gatsby77]

4 minutes ago, Sweet Lou 14 said:

I agree completely, but one of the quirks of human behavior and decision-making is that it's much easier to get a buyer to overpay by the same percentage when the absolute dollar amount is lower.

I have bought books worth $5 and I've bought books worth $50,000.  I wouldn't even blink at paying $10 for a $5 book (100% overpay) but I would be much more reluctant to pay $55,000 (10% markup) on that $50,000 book.  It will be interesting to see how well the RallyRd business model can exploit this tendency in human behavior, at least in the short term before there's enough of a track record to see how their investors have done on the shares they bought.

Sure.

And the more I think about it, they must be using the TMNT # 1 IPO as a loss leader for customer acquisition because (as @lou_fine noted) their margins are almost too low. After sales tax, storage, insurance, etc. there's not much left over for flipping a $59k net purchase for $65k.

And over-paying by just 10% for fractional ownership on a book like that - which we *know* has already sold for far more money in the past - is far more palatable than over-paying by 20%.

[blazingbob]

3 minutes ago, Gatsby77 said:

Sure.

And the more I think about it, they must be using the TMNT # 1 IPO as a loss leader for customer acquisition because (as @lou_fine noted) their margins are almost too low. After sales tax, storage, insurance, etc. there's not much left over for flipping a $59k net purchase for $65k.

And over-paying by just 10% for fractional ownership on a book like that - which we *know* has already sold for far more money in the past - is far more palatable than over-paying by 20%.

The last 9.8 sale of a TMNT #1 9.8 is $52,800 so based on $65k you are at 20% markup.

 

[The Lions Den]

22 hours ago, valiantman said:

RallyRd.com just sold out of shares in CGC 9.8 TMNT #1 and CGC 5.0 Captain America #3 (1st Stan Lee story) in about 5 minutes.

The CGC 9.8 TMNT #1 sold 1,000 shares at $65 each ($65,000) to 143 investors in about 2 minutes.

The CGC 5.0 Captain America #3 sold 1,000 shares at $37 each ($37,000) to 114 investors in about 3 minutes.

Other CGC-graded books have sold in 2020 as 1,000 shares each through RallyRd, including:

CGC 6.5 Amazing Spider-Man #1 ($27,000, 1 share was $27)

CGC 1.5 Batman #1 ($71,000, 1 share was $71, etc.)

CGC 9.4 Batman #3 ($80,000)

CGC 8.0 Incredible Hulk #1 ($89,000)

CGC 9.0 Star Wars #1 35-cent variant ($12,000)

CGC 9.0 Superman #21 ($8,500)

CGC 9.0 Daredevil #1 will be next for $11.50 per share ($11,500 total), the date has not been set.

There have been several discussions on this board through the years about the idea of partial ownership (shares) of expensive comics that are unaffordable for most collectors.  No, you don't get to hold the book in your hands or keep it for a day each year.  The books stay in the hands of the RallyRd company, which also has millions of dollars in exotic/classic cars and other classes of items sold as shares as well.  Each item is its own LLC and share buyers are legal owners in the LLC with a single asset... the collectible itself.  Regulated by the SEC, using a FINRA & SIPC broker. 

Instead of "what if?" this is a post about "what is."

RallyRd does not yet have a referral bonus, and I don't own any part of the company, so this isn't some spam/cashback post... it's board discussion.  Partial ownership in high dollar CGC graded books is now a thing.  

 

What happens if RallyRd vanishes into the ether..?

[Poekaymon]

9 minutes ago, The Lions Den said:

What happens if RallyRd vanishes into the ether..?

Governed by the SEC as with similar securities.  Liquidation of assets.  You will lose money, but that possibility is no doubt all over their disclaimer.  Unless you mean something more nefarious, then that's a different animal.  In general you probably shouldn't get in with anything you can't afford to lose, but that's good advice for almost any speculation.   

[D84]

13 minutes ago, The Lions Den said:

What happens if RallyRd vanishes into the ether..?

Bend over

[Gatsby77]

7 minutes ago, Poekaymon said:

Governed by the SEC as with similar securities.  Liquidation of assets.  You will lose money, but that possibility is no doubt all over their disclaimer.  Unless you mean something more nefarious, then that's a different animal.  In general you probably shouldn't get in with anything you can't afford to lose, but that's good advice for almost any speculation.   

It's worse than that.

As I noted a few pages back, each comic-backed "asset" is set up as its own company, so the company can declare bankruptcy, which would allow Rally Rd. to pay out investors only a small portion of the nominal share value owed.

Paging @delekkerste. Thoughts on this whole thing?

Edited July 25, 2020 by Gatsby77

[D84]

I can't wait for threads of people stating how this company screwed them. 🤣🤣🤣

[G.A.tor]

I don’t see this helping the hobby or value of gold and silver keys at all. It presumably initially benefits rally.  But just because someone “might” pay more for a fraction ownership than was initially paid (and that initial has a 20%? Markup over fmv already built in, again benefiting rally) it doesn’t affect value of someone else that owns same book in same grade.  
In cap 3 example last 3 public sales have been 32k, 30k and recently 24k at heritage. That doesn’t bode well for someone owning a share at 37k? And that surely wouldn’t inspire someone 90days later to now pay 40 for that 37 share that’s worth 30? 
 

great for rally, Not potentially great for anyone else 

[lou_fine]

44 minutes ago, Gatsby77 said:

And over-paying by just 10% for fractional ownership on a book like that - which we *know* has already sold for far more money in the past - is far more palatable than over-paying by 20%.

If you are referring to the outlier $90K copy which Heritage was able to auction off last summer, this is the exact same copy that RallyRD picked up from CC/Metro for only $59K and now have apparently sold off through these 1,000 shares at $65 a pop.  

 

41 minutes ago, blazingbob said:

The last 9.8 sale of a TMNT #1 9.8 is $52,800 so based on $65k you are at 20% markup.

 

No, the last CGC 9.8 sale for TMNT 1 was the CL copy which sold for $58K earlier this month which represents a 12% premium for the opportunity to buy into a TMNT without having to pay the full shot.  

[Hamlet]

 

10 minutes ago, G.A.tor said:

I don’t see this helping the hobby or value of gold and silver keys at all. It presumably initially benefits rally.  But just because someone “might” pay more for a fraction ownership than was initially paid (and that initial has a 20%? Markup over fmv already built in, again benefiting rally) it doesn’t affect value of someone else that owns same book in same grade.  
In cap 3 example last 3 public sales have been 32k, 30k and recently 24k at heritage. That doesn’t bode well for someone owning a share at 37k? And that surely wouldn’t inspire someone 90days later to now pay 40 for that 37 share that’s worth 30? 
 

great for rally, Not potentially great for anyone else 

This reminds me of the secondary market for timeshares.  I don’t know anyone who has been happy years later that they bought a timeshare.  However, I have heard stories about them having to dump them on the secondary market for a fraction of what they paid. I bet there are buyers on the timeshare secondary markets that have ended up with great deals.

I have no interest in paying inflated prices to own a fractional share of a comic.  However, I would be interested in buying those shares on the trading day at less than the market value of the comic 😀

That’s assuming I’m ever confident that this isn’t going to collapse on itself in a disaster of bankruptcy and out-of-country flights.

Edited July 25, 2020 by Hamlet

[lou_fine]

41 minutes ago, The Lions Den said:

RallyRd.com just sold out of shares in CGC 9.8 TMNT #1 and CGC 5.0 Captain America #3 (1st Stan Lee story) in about 5 minutes.

 

The CGC 5.0 Captain America #3 sold 1,000 shares at $37 each ($37,000) to 114 investors in about 3 minutes.

 

13 minutes ago, G.A.tor said:

In cap 3 example last 3 public sales have been 32k, 30k and recently 24k at heritage. That doesn’t bode well for someone owning a share at 37k? And that surely wouldn’t inspire someone 90days later to now pay 40 for that 37 share that’s worth 30? 

Since I don't have the time or patience to check through the past CL highlights and HA shows no CGC 5.0 graded sales for Cap 3, I assume they are probably referring to this copy here which they picked up from CC last year for $30,500:

If so, this would then represent a 21% markup over what they had paid for the book in the first place.  Like I have said before, not much room for locking in profits if they are then responsible for all of the ancillary costs like insurance, secured storage, administration fees, etc. while it is in their possession to make it much of a worthwhile venture.  

Which then makes me wonder if there is something else behind this little investment scheme of theirs in order to ensure it is a money maker for them?  

[lou_fine]

1 minute ago, lou_fine said:

Which then makes me wonder if there is something else behind this little investment scheme of theirs in order to ensure it is a money maker for them?  

 

And to answer my own question here, I believe the answer has already been posted by Gats who made a very astute observation in terms of the following scenario:

13 hours ago, Gatsby77 said:

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.

Haven't rerad through any of the details behind their plan, but is there any type of requirement to disclose the names of the owners who happens to own say 10% or 20% or more of the shares for any of these books here, similar to how companies are required to identify shareholders who own more than 10% of a publicly traded company?  

[bc]

[lou_fine]

51 minutes ago, Poekaymon said:

1 hour ago, The Lions Den said:

What happens if RallyRd vanishes into the ether..?

Governed by the SEC as with similar securities.  Liquidation of assets.  You will lose money, but that possibility is no doubt all over their disclaimer.  Unless you mean something more nefarious, then that's a different animal.  In general you probably shouldn't get in with anything you can't afford to lose, but that's good advice for almost any speculation.   

You as investors would most likely lose everything because aren't shareholders usually right at the bottom of the feeding list when it comes to the divvying up of assets for a bankrupt company that has closed up and gone out of business.    

Does anybody here have an idea how some of these other companies mentioned here that have done similar things with comic books have actually performed in this red hot bull comic book market which we have had the past few years?