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

[october]

30 minutes ago, valiantman said:

Whatever.

I'm done.  The concept is valid - someday a system will exist where I have $X and I can buy a digital stake in a real world comic book key issue, sell that stake or buy more at any time, 24/7, and when that system exists, it will be a shift unlike anything this industry has ever seen.  The proof is in these ridiculous $1,000 variants printed in the past 10 years.  People WANT to invest in their favorite characters, but instead of putting millions into key issues, they're putting millions into nothing books.  They have NO option to put $1,000 in Detective #27.  When they have that option, expect Punchline to be the punchline.

Ebay was a bad idea.

CGC was a bad idea.

DIgital shares of comic books are a bad idea.

Got it.

I think the idea could work, but only for select issues that are A) very expensive and B) not readily available. Take something like an unrestored midgrade or better Detective 27. The vast majority of collectors will never own one outright. It appears for sale infrequently enough to where cheaper comparable sales are not constantly depressing the value. I could see the stock price on something like that increasing enough demand wise to make investing worthwhile, even if the issue was never liquidated. 

On the other hand, something like a 9.8 ASM 300 would not work. The total market cap of the shares vs the cost of acquiring one outright is always available just by looking at eBay, and makes the premium you are paying for shares painfully obvious. That said, basic math doesn't stop people from flocking to social media comic raffles, so maybe it will be ignored in this case as well. 

[valiantman]

1 minute ago, october said:

I think the idea could work, but only for select issues that are A) very expensive and B) not readily available. Take something like an unrestored midgrade or better Detective 27. The vast majority of collectors will never own one outright. It appears for sale infrequently enough to where cheaper comparable sales are not constantly depressing the value. I could see the stock price on something like that increasing enough demand wise to make investing worthwhile, even if the issue was never liquidated. 

On the other hand, something like a 9.8 ASM 300 would not work. The total market cap of the shares vs the cost of acquiring one outright is always available just by looking at eBay, and makes the premium you are paying for shares painfully obvious. That said, basic math doesn't stop people from flocking to social media comic raffles, so maybe it will be ignored in this case as well. 

Correct - I believe that once the system exists, there will be books which are never liquidated, remaining in the system forever... much like stocks which are over 100 years old for the same company, never liquidated, never acquired, always partial ownership.

As far as your 9.8 ASM #300 scenario goes, I think there are three possibilities: 1) People DO want to pay $10 or $100 to own a part of 9.8 ASM #300, so it doesn't have any problem selling.  2) Specific books like 9.8 ASM #300 are traded as MULTIPLE copies, that is, buying into 9.8 ASM #300 would be buying a share of a collection of ten (roughly) identical CGC 9.8 ASM #300 copies - worth $25,000, not just one copy worth $2,500.  3)  Smaller books like 9.8 ASM #300 would be part of a "Venom Collection" which is traded as shares of one asset... the collection.

 

[valiantman]

Here's something to think about (for those who are inclined to think instead of "DO YOU POOH" on every idea)...

EVERY comic book is a share of the original print run.  Some portion of the original print run is gone forever, some portion is in bad shape, and some portion of the original print run is sitting in CGC slabs.

When a copy of Action Comics #1 or Amazing Fantasy #15 is sold, as a whole comic book, the "normal" way, then a SHARE of the "1st Appearance of Superman/Spider-Man" has changed hands.  Unless you owned all copies of Action Comics #1, you only own a SHARE in the "1st Appearance of Superman".  Why is Amazing Fantasy #15 worth so little compared to Action Comics #1?  Because there are more copies of Amazing Fantasy #15... even though we could argue that the "1st Appearance of Spider-Man" might be as big as the "1st Appearance of Superman"... and we'd test this theory by adding up the value of all the known copies of Action Comics #1 and adding up the value of all known copies of Amazing Fantasy #15, and see which concept is bigger... but ONE copy is ONE share of the concept of "1st Appearance of S-Man".

When we buy comic books, we have always been buying "shares" in the concepts we like... 1st appearance of someone, 1st artwork by favorite guy, 1st story by favorite girl, 1st battle between X and Y.  

If you own a slabbed Action Comics #1, you own about 1% of the known CGC graded global concept of "1st appearance of Superman".

If you own a slabbed Amazing Fantasy #15, you own about 0.03% of the known CGC graded global concept of "1st appearance of Spider-Man".

If you own a slabbed New Mutants #98, you own about 0.005% of the known CGC graded global concept of "1st appearance of Deadpool".

Those are normal, everyday ideas... buy 0.03% of whole idea of "1st appearance of Spider-Man".  Buy a slabbed New Mutants #98 and own 0.005% of "1st appearance of Deadpool".

But, if you want to own 0.03% of the "1st appearance of Superman" - you can't.  That would be a partial ownership in a copy of Action Comics #1 (and no, single pages don't count, the concept of 1st appearance of Superman would definitely include the cover).

You can buy 0.03% of "1st appearance of Spider-Man" but you can't buy 0.03% of "1st appearance of Superman".

Yet.

We're heading that direction, and I think it will be awesome when we get there.

[Gatsby77]

13 minutes ago, valiantman said:

Correct - I believe that once the system exists, there will be books which are never liquidated, remaining in the system forever... much like stocks which are over 100 years old for the same company, never liquidated, never acquired, always partial ownership.

As far as your 9.8 ASM #300 scenario goes, I think there are three possibilities: 1) People DO want to pay $10 or $100 to own a part of 9.8 ASM #300, so it doesn't have any problem selling.  2) Specific books like 9.8 ASM #300 are traded as MULTIPLE copies, that is, buying into 9.8 ASM #300 would be buying a share of a collection of ten (roughly) identical CGC 9.8 ASM #300 copies - worth $25,000, not just one copy worth $2,500.  3)  Smaller books like 9.8 ASM #300 would be part of a "Venom Collection" which is traded as shares of one asset... the collection.

 

A Venom ETF!

I *love* it.

Incidentally, when I had to sell off 90% of my collection back in 2014, there were only four books I knew I'd never own again - that even if I *could* afford them, I'd never be willing to buy them at current market prices. Whereas books like ASM 129, Avengers 1, X-Men 1, etc. are easy to buy at any time.

• Showcase # 4
• TMNT # 1
• Strange Tales # 110
• Venom # 1 (black)

Strange Tales 110 is more readily available than those other books, I just refuse to pay post-movie prices for it.

But I miss all of them.

[valiantman]

4 minutes ago, Gatsby77 said:

A Venom ETF!

I *love* it.

Incidentally, when I had to sell off 90% of my collection back in 2014, there were only four books I knew I'd never own again - that even if I *could* afford them, I'd never be willing to buy them at current market prices. Whereas books like ASM 129, Avengers 1, X-Men 1, etc. are easy to buy at any time.

• Showcase # 4
• TMNT # 1
• Strange Tales # 110
• Venom # 1 (black)

Strange Tales 110 is more readily available than those other books, I just refuse to pay post-movie prices for it.

But I miss all of them.

Careful, you sound like you're coming around to the idea.    Not specifically RallyRd, but the idea that partial ownership in something bigger, specific to comic books, would be enticing.

I don't care if it's RallyRd, someone else, or even a system developed by people from this board... as long as it is legit, as legit as trading any other assets (stocks, bonds, ETFs, cryptocurrency)... I'll be very excited to see what is available on the system.

Imagine a "MARVEL PHASE I FIRST APPEARANCES SET" with a CGC 8.0 for each first appearance of title character movies from Marvel 2008-2012.  Why not CGC 9.0?  Why not CGC 6.0?  I wonder which would grow faster if the same books were included. 

Put $100 into each of them and find out.

Man, this thing could be fun.

[valiantman]

Another idea...

Trading fees associated with digital trades for asset-backed shares... we've mentioned that they would pay for the system itself and be the financial incentive to put books (or any collectibles) into the system, but WHAT IF a portion of those trading fees was also paid back to shareholders as a dividend?

Take a portion of each trade... 0.1%?  0.2%?  ...and split the revenue between the exchange owner, the asset security/insurance, and the shareholders themselves for that asset.

Why not?  Suddenly these "stale investments" become active dividend-producing equities.

Ummm... this sounds awesome.  Who wants to rain on this idea parade?

[Gatsby77]

1 minute ago, valiantman said:

Careful, you sound like you're coming around to the idea.    Not specifically RallyRd, but the idea that partial ownership in something bigger, specific to comic books, would be enticing.

I don't care if it's RallyRd, someone else, or even a system developed by people from this board... as long as it is legit, as legit as trading any other assets (stocks, bonds, ETFs, cryptocurrency)... I'll be very excited to see what is available on the system.

Imagine a "MARVEL PHASE I FIRST APPEARANCES SET" with a CGC 8.0 for each first appearance of title character movies from Marvel 2008-2012.  Why not CGC 9.0?  Why not CGC 6.0?  I wonder which would grow faster if the same books were included. 

Put $100 into each of them and find out.

Man, this thing could be fun.

Enjoy burning your 20%-40%.

Money is money.

Hell, I'd rather have 100% of a Bloodshot vol. 5 # 1 carbon fiber solid adamantium alloy variant than buy into anything at that mark-up.

[Hollywood1892]

1 hour ago, valiantman said:

You mean like the comic book industry?  

Nice one!

[valiantman]

5 minutes ago, Gatsby77 said:

12 minutes ago, valiantman said:

Careful, you sound like you're coming around to the idea.    Not specifically RallyRd, but the idea that partial ownership in something bigger, specific to comic books, would be enticing.

I don't care if it's RallyRd, someone else, or even a system developed by people from this board... as long as it is legit, as legit as trading any other assets (stocks, bonds, ETFs, cryptocurrency)... I'll be very excited to see what is available on the system.

Imagine a "MARVEL PHASE I FIRST APPEARANCES SET" with a CGC 8.0 for each first appearance of title character movies from Marvel 2008-2012.  Why not CGC 9.0?  Why not CGC 6.0?  I wonder which would grow faster if the same books were included. 

Put $100 into each of them and find out.

Man, this thing could be fun.

Enjoy burning your 20%-40%.

Money is money.

Hell, I'd rather have 100% of a Bloodshot vol. 5 # 1 carbon fiber solid adamantium alloy variant than buy into anything at that mark-up.

20% to 40% (or whatever premium) would be decided by whatever the market can bear.  CGC was the same way.  Overstreet told us NM prices for decades, but a true CGC 9.4 is a different animal... so much so that Overstreet doesn't even ATTEMPT to give CGC 9.4 values anymore.  The CGC premium is a confidence-level built into a raw comic book.  When there is a digital exchange for CGC graded comics, it WILL most likely have a premium built into it, for the ease of trading, the lower entry price point, the lack of shipping costs, etc.  Will it be 20% to 40%?  Maybe... but will it be 0%?  Unlikely.  You can own a portion of a comic book you couldn't otherwise afford, which will stay protected by security you couldn't otherwise afford, which won't have to be shipped to you at additional cost, which will be available to liquidate at any time on a 24/7 digital exchange.  That sounds like a "value add" (or four) to me, and "value add" usually adds cost.

[bc]

8 minutes ago, valiantman said:

Another idea...

Trading fees associated with digital trades for asset-backed shares... we've mentioned that they would pay for the system itself and be the financial incentive to put books (or any collectibles) into the system, but WHAT IF a portion of those trading fees was also paid back to shareholders as a dividend?

Take a portion of each trade... 0.1%?  0.2%?  ...and split the revenue between the exchange owner, the asset security/insurance, and the shareholders themselves for that asset.

Why not?  Suddenly these "stale investments" become active dividend-producing equities.

Ummm... this sounds awesome.  Who wants to rain on this idea parade?

Not rain, more like a big cloud...

To generate any amount of dividends would require a very robust amount of transactions and/or potentially high trading fees. Otherwise it's just another way to milk incremental money from the existing stockholders.

The cost of building the "system itself" not only includes upfront capital but ongoing infrastructure costs and software development. There is also the required security, published governance, a regulatory body, enforcement options, etc - all things that could be copied from existing financial instruments - but there is a cost.

Dividends are typically paid from actual (audited) booked profit. Unless the Asset actually sells, all the profit is just paper-based.

Keep going man - it's a fun mental exercise.

-bc

[Hollywood1892]

Thing is the company cannot determine the value of the product they are putting forth shares on, which sounds "questionable" to me.

What I mean is this, if everyone stopped buying AF 15 the value of the book wouldn't drop, but if everyone stopped buying apple products then their shares would be worthless, like most companies that you can buy stocks in, their value is determined by the shares they sell, not so in this situation, the value is determined by the price someone will pay for the actual product outside of what the product they are claiming shares in.

What if that product was destroyed?

Edited July 27, 2020 by Hollywood1892

[valiantman]

1 minute ago, bc said:

Not rain, more like a big cloud...

To generate any amount of dividends would require a very robust amount of transactions and/or potentially high trading fees. Otherwise it's just another way to milk incremental money from the existing stockholders.

The cost of building the "system itself" not only includes upfront capital but ongoing infrastructure costs and software development. There is also the required security, published governance, a regulatory body, enforcement options, etc - all things that could be copied from existing financial instruments - but there is a cost.

Dividends are typically paid from actual (audited) booked profit. Unless the Asset actually sells, all the profit is just paper-based.

Keep going man - it's a fun mental exercise.

-bc

Right - all those costs are a given, but if an exchange (any exchange, stocks/crypto/comics, whatever) is charging 0.1% - 0.5% on every trade, is there any reason a portion of those fees cannot go back to the shareholders of the item being traded?  Dividends from booked profit don't apply to static items, but trading fees are an activity related to that item.  so, trading fees as a dividend?

[valiantman]

3 minutes ago, Hollywood1892 said:

Thing is the company cannot determine the value of the product they are putting forth shares on, which sounds "questionable" to me.

What do you mean?  They bought Captain America #3 for $35,500 and they offered 1,000 shares at $37 each.  No one can put a "factual value" on a comic book until it is sold, whether it's by 1,000 shares or just a book straight out of whatever short box is sitting next to you.

Edited July 27, 2020 by valiantman

[bc]

Just now, valiantman said:

Right - all those costs are a given, but if an exchange (any exchange, stocks/crypto/comics, whatever) is charging 0.1% - 0.5% on every trade, is there any reason a portion of those fees cannot go back to the shareholders of the item being traded?  Dividends from booked profit don't apply to static items, but trading fees are an activity related to that item.  so, trading fees as a dividend?

You do realize that all the major online equity brokers have adopted the 0.00000% trading fee (which may have some limits on it).

If it becomes as popular as you think, they would probably make more money selling the advertising space on their mobile app or their data analytics. 

-bc

 

[manetteska]

Keeping RallyRd out of this and just speaking on the concept:

I believe there will be a (rather small) group of people who would enjoy owning a logical fraction of a major comic. I believe another (larger) group of people will see this system as a mini-stock market, not caring about the comics at all, but another way (or main way) of generating money. However, the main difference here, is that the comics market is much easier to falsely manipulate.

OP continues to mention the ridiculous prices of modern variants; don't you think those will make it into this system as well? Especially if they sell at $10k+? Is there a gatekeeper to only allow certain books into the market?

[Gatsby77]

40 minutes ago, valiantman said:

What do you mean?  They bought Captain America #3 for $35,500 and they offered 1,000 shares at $37 each.  No one can put a "factual value" on a comic book until it is sold, whether it's by 1,000 shares or just a book straight out of whatever short box is sitting next to you.

Except, we know the factual value of that book is less than $37,000.

It's *never* sold for $37,000 in that grade and the last sale of a comp (another cgc 5.0 copy) sold two weeks ago for less than $24,000 all-in.

As G.A.tor noted twice in the Golden Age thread on this topic, this type of trading won't really affect the *actual* value of the books.

[bronze_rules]

If they somehow guaranteed a discount to fair market value (even then, how would that be objectively determined), like if they bought it at 10k and the value was 12k, it might give an incentive to buy and flip or sell shares later.  Or a discount to their purchase price, the incentive being that buyers are helping the main buyer come up with capital, kind of like venture firms, same logic, there might be an incentive. Aside from all the other concerns like liquidity and slippage, the model of buying way above market price and the spread going to the business owners, is a pretty poor incentive. The whole, you get to buy a piece of the mona lisa, but never get to touch or have it in your hands, is comical for anyone to be persuaded by it. The only incentive would be to flip for a calculated profit.

[october]

10 minutes ago, Gatsby77 said:

 

As G.A.tor noted twice in the Golden Age thread on this topic, this type of trading won't really affect the *actual* value of the books.

I think it depends on the comic and the level of market acceptance. Would this trading impact ASM 300 in 9.8? No, there are too many copies out there. Would it impact the price of Action 1 if they make enough money on this to compete on blue labels when the pop up? I think it could. 

[valiantman]

13 minutes ago, Gatsby77 said:

57 minutes ago, valiantman said:

What do you mean?  They bought Captain America #3 for $35,500 and they offered 1,000 shares at $37 each.  No one can put a "factual value" on a comic book until it is sold, whether it's by 1,000 shares or just a book straight out of whatever short box is sitting next to you.

Except, we know the factual value of that book is less than $37,000.

It's *never* sold for $37,000 in that grade and the last sale of a comp (another cgc 5.0 copy) sold two weeks ago for less than $24,000 all-in.

As G.A.tor noted twice in the Golden Age thread on this topic, this type of trading won't really affect the *actual* value of the books.

Except, we know the factual situation that 1,000 shares in CGC 5.0 Captain America #3 sold out in three minutes at $37 each.

Instead of thinking about the max that a high value comic has sold for, why not consider the ONLY price that a CGC 5.0 Captain America #3 has reached when open to anyone with $37 to invest?

The price of high value comic books is currently LIMITED by the cost of entry.  If you lower the cost of entry, the price is no longer limited.

In other words, certain books will skyrocket when digital shares are introduced... held back all this time by the number of people able to play the game.

When everyone can play the game, the prices will rise on anything worth owning.  1st Stan Lee is one of those things.

[Hollywood1892]

1 hour ago, valiantman said:

Careful, you sound like you're coming around to the idea.    Not specifically RallyRd, but the idea that partial ownership in something bigger, specific to comic books, would be enticing.

I don't care if it's RallyRd, someone else, or even a system developed by people from this board... as long as it is legit, as legit as trading any other assets (stocks, bonds, ETFs, cryptocurrency)... I'll be very excited to see what is available on the system.

Imagine a "MARVEL PHASE I FIRST APPEARANCES SET" with a CGC 8.0 for each first appearance of title character movies from Marvel 2008-2012.  Why not CGC 9.0?  Why not CGC 6.0?  I wonder which would grow faster if the same books were included. 

Put $100 into each of them and find out.

Man, this thing could be fun.

It might work