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RallyRd - that old idea about partial ownership of comics is a reality (updated July 21, 2021)
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575 posts in this topic

1 hour ago, Kryptic1 said:

This is the one of the problems with the business model.  The shareholders of the assets will want RallyRd to hold the asset forever while we buy and sell shares, but most of RallyRd’s revenue comes from the sale of the asset.  If you look at the SEC filing, their only revenue from the purchase is a sourcing fee that is usually less than 3%.  The rest of the money goes to the cost of the book and expenses related to the offering.  They make no money off the trading of the shares.  They front the money for all storage, security, insurance, and administrative costs and they only collect on that when they sell the book.  When you buy shares in a book, you are taking on a liability for an unknown amount of accrued expenses that will be paid when they choose to sell the book.  Would you buy shares at a premium to the market value of the book knowing that it can be sold at any time for market value minus expenses?

I like the idea of fractional ownership, but the goal has to be to keep the overhead as low as possible.  These aren’t income-generating assets, so every dollar of expense lowers your return.

I'm guessing this falls under the "passive investing" moniker.

Next comes the comic index fund,  the comic small cap fund,  on and on we go.

Edited by blazingbob
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5 hours ago, blazingbob said:

So what are you proposing be used to "Mark to Market" which is what most companies do when they have to report earnings and own other company stock?  90 day/120.  

Nothing? I have no real interest in the concept so I couldn't care less about the ins and outs of it. I was commenting on one specific thing, FMV and how it is determined. I've said it multiple times on this board, there is no one specific FMV price for any book in any grade. All books sell within a range of prices and that range usually moves up and down by 20-30% on a regular basis. It's really difficult to say something is overpriced by 20% when that 20% is within the normal and expected range of outcomes for a book. 

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On 7/31/2020 at 10:52 AM, GM8 said:

I only see AF 15 7.0 on your site. What other books do you have?

How is ownership structured differently than RallyRd?>

Hi @GM8, although I can't speak on specifics of their business, the general ownership structure is the same. Each asset is its own LLC, which is split into shares, securitized, and shares sold in an IPO. Although the shares are generally non-voting, sentiment is taken for the disposition of the assets when private offers are received. In addition to AF15, other comics we're preparing for IPO (but not yet listed) include Fantastic Four #1, All-Star Comics #8, Journey into Mystery #83, and more.

On 8/1/2020 at 11:08 AM, bb8 said:

I don't think people are getting the gist of what's going on here. I honestly don't think this business model is designed to sell the actual asset once obtained. The company sells fractional shares of a desirable, unobtainable otherwise asset, obtains the asset, and then sits on it and allows fractional owners to buy and sell their stake. The allure to the investor is having stake in something they could not otherwise obtain. The overall value of the comic after it's purchased doesn't really matter. What matters is how badly someone will want their little piece. And every 90 days they'll be able to trade in a certain window set by the company.

What I don't understand is how the company is going to monetize trading. Initially, sure, they take the leftover money after the book is purchased. Financial markets make money by charging a transaction fee to buyers. I'm assuming running the market would have costs associated, but RallyRd has said they don't do that. Maybe they will in the future? It's zero now but as it gets popular (they hope) they'll be able to charge?

Bottom line is that the draw is partial ownership. The asset's overall value is not important unless the comic is sold. Who gets to decide that? RallRD / Mythic Markets or some majority of shareholders? That I'm not sure.

Now, having said this I think this is a stupid investment vehicle. The asset produces nothing and has no intrinsic value. Public companies, though flawed, produce goods and/or services and provide employment for many, many people; and gold at least has intrinsic, anciently-established value. That said, the books sitting in my collection do nothing either. But at least I hold them and can make sweet, sweet love to them. More importantly, I have final say over whether I want to sell them.

Some of our investors are drawn to the investment opportunity and return potential, while others are excited about owning a stake in that rare, out of reach thing. Ultimately, supply and demand of the shares will determine the value of the unique asset being traded amongst many investors, and not necessarily the value of the book to a single person. This is the major paradigm shift of our platforms. However, it's a shift that most people aren't yet accustomed to and, as low-cap companies with relatively low liquidity today, trading periods are spaced out to batch volume.

Each of our companies may pursue different long term business models, but the primary source of our revenue will not be in the short-term turnover of the assets, fees baked into the initial offerings, or trading. We work with registered broker-dealers partners to enable our services, and cannot legally collect commissions on trading without registered reps. Although it may change in the future, investors' expectations are that trading remain commission-free, which we work hard (and at great expense) to offer.

As previously mentioned, the shares are non-voting for a few key reasons, one of which is to prevent hostile takeovers by major shareholders. Each asset is its own company and capable of generating revenue through a variety of methods including sponsorship, exhibits, etc.

As with art and artifacts, the value of comic books, collectible cards, etc can be attributed to their intrinsic social and cultural value, and by those who want or care about them. They've been attributed value by collectors/investors, as well as by the fans (old and new). Superhero films have been an amazing boon to comic collectors, creating enormous cultural awareness around these stories. Platforms like Mythic Markets give people access to this market that they previously lacked the awareness or financial capacity for. For others, it's an opportunity to diversify and unlock liquidity.

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49 minutes ago, LordRahl said:

Nothing? I have no real interest in the concept so I couldn't care less about the ins and outs of it. I was commenting on one specific thing, FMV and how it is determined. I've said it multiple times on this board, there is no one specific FMV price for any book in any grade. All books sell within a range of prices and that range usually moves up and down by 20-30% on a regular basis. It's really difficult to say something is overpriced by 20% when that 20% is within the normal and expected range of outcomes for a book. 

?

There is no one specific FMV price for any book in any grade?

There absolutely *is* for most Copper Age - present books, where there's sufficient transaction volume. Again - ASM 300, 361, New Mutants 87, 98, Batman Adventures 12.

Even common Marvel Silver Age books like Daredevil 1 or Iron Man 1 in CGC 8.5 and below.

The issue is, that's not the types of books these services are targeting.

But trends still matter. As noted earlier, even Amazing Fantasy 15 is on a clear downward trajectory in 8.0 and below -- at least from two years ago.

That makes sense - three major Spider-Man films (Into the Spider-verse, Far From Home, and Endgame) have all come and gone, so there's less attention on the character and smarter near-term investments (like FF # 1). 

So in this case, the last sale of AF 15 (whatever the grade) matters, because why buy in at a +20% price point today (say...$210,000 for a CGC 8.0), when the trend shows the actual value of a CGC 8.0 is $175,000?

For the third time, over-paying by 20% is still over-paying by 20%, whether you lose $20 or $35,000. 

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1 hour ago, Mythic Markets said:

Each asset is its own company and capable of generating revenue through a variety of methods including sponsorship, exhibits, etc.

'Sponsorship, exhibits, etc'? That sounds pretty vague. I would want to know much more about your business model before I would ever invest (if I were interested). What happens if the 'company' goes belly-up because the old paper can't generate a good enough revenue stream? The asset would be sold with creditors taking the lion's share while the shareholder is left with pennies on the dollar or nothing at all. The opportunity cost here is just too much for me to ever invest.

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1 hour ago, Gatsby77 said:

?

There is no one specific FMV price for any book in any grade?

There absolutely *is* for most Copper Age - present books, where there's sufficient transaction volume. Again - ASM 300, 361, New Mutants 87, 98, Batman Adventures 12.

Even common Marvel Silver Age books like Daredevil 1 or Iron Man 1 in CGC 8.5 and below.

The issue is, that's not the types of books these services are targeting.

But trends still matter. As noted earlier, even Amazing Fantasy 15 is on a clear downward trajectory in 8.0 and below -- at least from two years ago.

That makes sense - three major Spider-Man films (Into the Spider-verse, Far From Home, and Endgame) have all come and gone, so there's less attention on the character and smarter near-term investments (like FF # 1). 

So in this case, the last sale of AF 15 (whatever the grade) matters, because why buy in at a +20% price point today (say...$210,000 for a CGC 8.0), when the trend shows the actual value of a CGC 8.0 is $175,000?

For the third time, over-paying by 20% is still over-paying by 20%, whether you lose $20 or $35,000. 

Is that right? I don't know if you are just arguing to argue or if you don't know what you're talking about but assume that you do. This is the last 3 months of sales of ASM 300 in 9.8. You tell me, what is FMV? $1900 or $2800? By the way that is approximately a 40% difference in price.

$2760 2063560003  
Jul-17 $2850 1402415001  
Jul-12 $2425 1295155003  
Jul-12 $2750 1226022002  
Jul-10 $2450 2104290002  
Jul-10 $2500 1989805004  
Jul-09 $2500 1228314005  
Jul-02 $1246 1329433004  
Jun-30 $2082 2108937007  
Jun-29 $2295 2051768002  
Jun-23 $2500 0006544003  
Jun-13 $2500 0790595013  
Jun-06 $2163 0074705001  
May-20 $1925 0006544003  
May-17 $2350 2104291001  
May-13 $2250 2028789004  
May-13 $2200 0214506016  
May-03 $1860 2100656004  
Edited by LordRahl
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1 hour ago, bb8 said:

'Sponsorship, exhibits, etc'? That sounds pretty vague. I would want to know much more about your business model before I would ever invest (if I were interested). What happens if the 'company' goes belly-up because the old paper can't generate a good enough revenue stream? The asset would be sold with creditors taking the lion's share while the shareholder is left with pennies on the dollar or nothing at all. The opportunity cost here is just too much for me to ever invest.

That line jumped out to me as well.  AF 15 and FF 1 are valuable assets, but nowhere near rare enough, or interesting enough to the general public, to attract "sponsorships" or generate revenue from "exhibits."

If they are really trying to go in that direction, they will need to target much, much, MUCH more unique assets.

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13 hours ago, LordRahl said:

Hang on, I missed that there was a $1200 sale for ASM 300 in 9.8. So that is now a range of $1200-2800 in 3 months time. What is FMV again @Gatsby77? Just a ludicrous argument that there is a set FMV for any book.

Believe it or not, a single "Fair Market Value" for this book exists, because we have the transaction volume to determine an accurate value.

It's $2,300 - the pure average of the last 17 sales you list.

That's what the book is "worth." -- yes -- the $1,246 sale was an outlier to the downside (a great pick-up!) but it doesn't suddenly make the book worth that much, any more than the $2,850 sale makes the book worth that much.

GPA variance is natural also because of venue arbitrage. An eBay sale might be 10-15% different from one at Heritage due to postage differences or bidding variance due to the differing house takes.

But the value of this book is $2,300 -- not "$1,800 - $2,800."

This has been standard since the beginning of the hobby -- the difference is GPA (with all of its flaws and susceptibility to manipulation) has enabled us to get more accurate vs. the single value determined by Overstreet's based on dealer's reports alone.

 

But back to the point, depending on "investors" to consistently overpay by 20-40% (as shown by Rally Road's sales prices vs. trailing average FMVs -- isn't a sustainable business model).

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3 hours ago, Gatsby77 said:

Believe it or not, a single "Fair Market Value" for this book exists, because we have the transaction volume to determine an accurate value.

It's $2,300 - the pure average of the last 17 sales you list.

That's what the book is "worth." -- yes -- the $1,246 sale was an outlier to the downside (a great pick-up!) but it doesn't suddenly make the book worth that much, any more than the $2,850 sale makes the book worth that much.

GPA variance is natural also because of venue arbitrage. An eBay sale might be 10-15% different from one at Heritage due to postage differences or bidding variance due to the differing house takes.

But the value of this book is $2,300 -- not "$1,800 - $2,800."

This has been standard since the beginning of the hobby -- the difference is GPA (with all of its flaws and susceptibility to manipulation) has enabled us to get more accurate vs. the single value determined by Overstreet's based on dealer's reports alone.

 

But back to the point, depending on "investors" to consistently overpay by 20-40% (as shown by Rally Road's sales prices vs. trailing average FMVs -- isn't a sustainable business model).

And who are you to dictate that the FMV is the average over the last 17 sales? I think it's the average of the last 6 sales. Someone else thinks it's the average of the last 12 sales, etc.

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5 hours ago, Gatsby77 said:

Believe it or not, a single "Fair Market Value" for this book exists, because we have the transaction volume to determine an accurate value.

It's $2,300 - the pure average of the last 17 sales you list.

That's what the book is "worth." -- yes -- the $1,246 sale was an outlier to the downside (a great pick-up!) but it doesn't suddenly make the book worth that much, any more than the $2,850 sale makes the book worth that much.

GPA variance is natural also because of venue arbitrage. An eBay sale might be 10-15% different from one at Heritage due to postage differences or bidding variance due to the differing house takes.

But the value of this book is $2,300 -- not "$1,800 - $2,800."

This has been standard since the beginning of the hobby -- the difference is GPA (with all of its flaws and susceptibility to manipulation) has enabled us to get more accurate vs. the single value determined by Overstreet's based on dealer's reports alone.

 

But back to the point, depending on "investors" to consistently overpay by 20-40% (as shown by Rally Road's sales prices vs. trailing average FMVs -- isn't a sustainable business model).

:facepalm: Cool story but I'm moving on with my life. It seems you can't see reason even when it slaps you in the face.

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5 hours ago, Gatsby77 said:

Believe it or not, a single "Fair Market Value" for this book exists, because we have the transaction volume to determine an accurate value.

It's $2,300 - the pure average of the last 17 sales you list.

That's what the book is "worth." -- yes -- the $1,246 sale was an outlier to the downside (a great pick-up!) but it doesn't suddenly make the book worth that much, any more than the $2,850 sale makes the book worth that much.

GPA variance is natural also because of venue arbitrage. An eBay sale might be 10-15% different from one at Heritage due to postage differences or bidding variance due to the differing house takes.

But the value of this book is $2,300 -- not "$1,800 - $2,800."

This has been standard since the beginning of the hobby -- the difference is GPA (with all of its flaws and susceptibility to manipulation) has enabled us to get more accurate vs. the single value determined by Overstreet's based on dealer's reports alone.

 

But back to the point, depending on "investors" to consistently overpay by 20-40% (as shown by Rally Road's sales prices vs. trailing average FMVs -- isn't a sustainable business model).

The wrong answer is that the book is worth $2300.  The correct answer is the book is worth $1800 if I'm buying it from you, and worth $2800 if you're buying it from me.

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On 8/2/2020 at 1:41 PM, wombat said:

It appears no one actually owns a share of a comic. They own a share of a company that owns a comic. Maybe I'm missing something. 

In essence, you do own a share of the comic (or other asset).  I'll break it down.

You can't easily part out a comic book between multiple people where 10 people take a single page home, and you couldn't part out a company like Apple where somebody owns a part of the iPhone tooling and another owns a faucet in the micro-kitchen, etc.  We needed to create a structure that could be split into representative shares and sold.  That's where the LLC structure comes in.  That company exists solely to own and hold that comic book in title, is parted out and securitized, and sold.  Investors are buying a piece of that company in basically the same way as investors buy a piece of Apple when purchasing its stock.

On 8/2/2020 at 2:17 PM, bb8 said:

'Sponsorship, exhibits, etc'? That sounds pretty vague. I would want to know much more about your business model before I would ever invest (if I were interested). What happens if the 'company' goes belly-up because the old paper can't generate a good enough revenue stream? The asset would be sold with creditors taking the lion's share while the shareholder is left with pennies on the dollar or nothing at all. The opportunity cost here is just too much for me to ever invest.

The LLCs are financially supported by the Manager (INC parent company) until such time as they become self-supporting.  In the case you're describing, the LLC would simply liquidate the asset at market value, and distribute the proceeds to shareholders of the LLC, based upon their pro rata ownership.  The LLC structure is specifically designed to shield the asset and its company's shareholders from any liabilities of the Manager or other assets.

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23 hours ago, thunsicker said:

The wrong answer is that the book is worth $2300.  The correct answer is the book is worth $1800 if I'm buying it from you, and worth $2800 if you're buying it from me.

Wait, you offered it to me for $3,200 :S

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On 8/3/2020 at 5:28 AM, Gatsby77 said:

Believe it or not, a single "Fair Market Value" for this book exists, because we have the transaction volume to determine an accurate value.

It's $2,300 - the pure average of the last 17 sales you list.

That's what the book is "worth." -- yes -- the $1,246 sale was an outlier to the downside (a great pick-up!) but it doesn't suddenly make the book worth that much, any more than the $2,850 sale makes the book worth that much.

GPA variance is natural also because of venue arbitrage. An eBay sale might be 10-15% different from one at Heritage due to postage differences or bidding variance due to the differing house takes.

But the value of this book is $2,300 -- not "$1,800 - $2,800."

This has been standard since the beginning of the hobby -- the difference is GPA (with all of its flaws and susceptibility to manipulation) has enabled us to get more accurate vs. the single value determined by Overstreet's based on dealer's reports alone.

 

But back to the point, depending on "investors" to consistently overpay by 20-40% (as shown by Rally Road's sales prices vs. trailing average FMVs -- isn't a sustainable business model).

Shouldn’t the value actually be a moving weighted value hm

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5 hours ago, Mythic Markets said:

Investors are buying a piece of that company in basically the same way as investors buy a piece of Apple when purchasing its stock.

I don't think this is remotely close.   It would make more sense if you said, we are buying a piece of Rally Rd.   This is more like we are buying an Iphone, and nobody gets to use it. 

Edited by Mercury Man
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On 8/4/2020 at 1:48 PM, batman_fan said:

Shouldn’t the value actually be a moving weighted value hm

Actually, yes.

And this is why the "last sale" matters - it points to either positive or negative momentum, even if it's later judged to be "just an outlier."

For example, in the last 5-6 days since we've been debating the FMV of ASM 300 there's been another GPA sale at $2,700.

So the new 90-day average is $2,358 (over 18 sales). I'll readily concede that FMV of the book is now $2,400+, because after taxes and postage, that's what it would cost to acquire the book - and it seems to be inching upwards overall.

Also notable, only this week did GPA remove the $4,500 newsstand 9.8 sale, breaking it out into its own category of "newsstand" copies. Looks like they may do that moving forward, as they have with Image # 1 newsstands for some time.

Edited by Gatsby77
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On 8/2/2020 at 6:05 PM, LordRahl said:

Is that right? I don't know if you are just arguing to argue or if you don't know what you're talking about but assume that you do. This is the last 3 months of sales of ASM 300 in 9.8. You tell me, what is FMV? $1900 or $2800? By the way that is approximately a 40% difference in price.

$2760 2063560003  
Jul-17 $2850 1402415001  
Jul-12 $2425 1295155003  
Jul-12 $2750 1226022002  
Jul-10 $2450 2104290002  
Jul-10 $2500 1989805004  
Jul-09 $2500 1228314005  
Jul-02 $1246 1329433004  
Jun-30 $2082 2108937007  
Jun-29 $2295 2051768002  
Jun-23 $2500 0006544003  
Jun-13 $2500 0790595013  
Jun-06 $2163 0074705001  
May-20 $1925 0006544003  
May-17 $2350 2104291001  
May-13 $2250 2028789004  
May-13 $2200 0214506016  
May-03 $1860 2100656004  

Are these all auctions? There is more to value than CGC grade but anyone can put a comic up at a buy it now and sell for less than it goes for. Maybe that same copy was auctioned later and shows up here twice. And some auctions are from more reputable sellers than others. There are real going prices for common, desirable books just like there are deals and asking prices that are unrealistically high. You would need to sift through those to get the "actual" value a rational person should pay.

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