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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

3 minutes ago, AnkurJ said:
5 minutes ago, valiantman said:

Minimum investment at Masterworks.io is $10,000.  If you can afford to play around at that level, you can just buy Ditko and Kirby pieces outright.

Not primo Kirby or Ditko Spider-Man.

I specifically asked Masterworks about a Frazetta, pointing to the Egyptian Queen sale.  They told me to check with RallyRd.  I don't think Kirby and Ditko are Frazetta level prices yet.

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3 minutes ago, Sweet Lou 14 said:
11 minutes ago, valiantman said:

The point of RallyRd.com is that the participants can't afford a $10,000 book.  Otherwise, they would buy it outright.  Your scenario has two people who can afford $10,000, and the RallyRd scenario has a share of CGC 9.0 Daredevil #1 for $11.50 (coming soon).  About a hundred people will take part in the $11.50 shares for probably around $115 (on average) each, and it's unlikely that anyone with $10,000 to spend will even bother to think twice about it.  BIg books for big players has always been the problem.  Big books for small players has always been an opportunity... a big one.

I understand all that.

Would it have helped if I'd said the bet was for $100 instead of $10,000?  The principle is exactly the same.

Your scenario involves people having and using $10,000 to fully own (or short sell, to buy later) a comic book.  If those are the people you're talking about, then you're not talking about a RallyRd scenario, which requires $11.50 to own part of a $10,000 comic.

If you're changing the comic to a $100 comic book, then why would anyone worry about short selling?  Someone really getting rich off $100?  Potential losses in the thousands (unlimited, in principle) and max gain is $100?  No purpose.

Edited by valiantman
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3 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.  

 

So, I have a number of questions here.  Does the "share value" fluctuate?  Let's say I bought one share of TMNT #1 for $65.  and at the next HA auction a 9.8 sells for $75,000.  Does that mean my share is now worth $75?  When does RallyRd.com sell the asset?  Let's say the next Heritage auction the floor falls out on TMNT #1 and a 9.8 sells for $45,000.  Do they just continue to hold the book and assume it's worth $65,000?  

How is the LLC constructed?  Is it a tax pass through?  Who's eating the sales commission costs?

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Just now, valiantman said:

Your scenario involves people having and using $10,000 to fully own (or short sell, to buy later) a comic book.  If those are the people you're talking about, then you're not talking about a RallyRd scenario, which requires $11.50 to own part of a $10,000 comic.

Serious question:  Are you misunderstanding me on purpose?

I simply explained that short selling is something that can be done with comics.  I never in any way put my example in the context of this RallyRd site.  I specifically said that my example would only work on an entire comic, not on a fractional share.  In fact I specifically said it probably only works if two people agree on a specific copy of a particular book.  Because I don't think any buyer in their right mind would agree to buy a book sight unseen, giving the so-called short seller ample opportunity to find the cheapest book possible that he can argue meets the buyer's criteria.  That scenario would be a dispute waiting to happen.

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17 minutes ago, jaybuck43 said:

So, I have a number of questions here.  Does the "share value" fluctuate?  Let's say I bought one share of TMNT #1 for $65.  and at the next HA auction a 9.8 sells for $75,000.  Does that mean my share is now worth $75?  When does RallyRd.com sell the asset?  Let's say the next Heritage auction the floor falls out on TMNT #1 and a 9.8 sells for $45,000.  Do they just continue to hold the book and assume it's worth $65,000?  

How is the LLC constructed?  Is it a tax pass through?  Who's eating the sales commission costs?

After 90 days, the shares of an item have one day of "open trading".  Anyone holding the shares can set an ask price.  Anyone wanting the shares can set a bid price.  At the close of business (that one day), the system settles the asks and bids.  Sometimes the bids are higher than prior sales, asks are higher, and the settlement price is higher.  Sometimes, it's lower.  90 days of waiting until the next trading day.  If the other copies in the real world go up, it's likely that those with shares to sell will ask more.  If bidders want in at $75/share instead of $65/share, then it will probably settle around $75/share.  If the price falls and all bids are $45 and all asks are $65, then the settlement would be "no shares traded".  Those holding at $65/share would have to decide if they'll accept less at the next one-day trade or just hold.

RallyRd.com sells an asset when they get an outside offer high enough to bring before the shareholders.  In early May 2020, RallyRd offered PSA 10 Michael Jordan 1986 Fleer rookie card for $40 per share ($40,000 total).  Before the end of May 2020, RallyRd received an outside offer of $71,640 for the card.  60% of shareholders voted to sell, so all (100% of) shares were sold (the item sold to a new owner), and all shareholders had cash balances by the first of June of $71.64 per share.  That all happened in one month. 

image.png.2558d322b098c7b3d15b9b34d0e06e8f.png

 

LLC info is probably here: https://rallyrd.com/disclaimer/  (or elsewhere on the site)

There are no sales commissions.  It's all electronic, so the idea that sales must have commissions is antiquated because databases and servers are pretty cheap at this point.

 

Edited by valiantman
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9 minutes ago, Sweet Lou 14 said:
13 minutes ago, valiantman said:

Your scenario involves people having and using $10,000 to fully own (or short sell, to buy later) a comic book.  If those are the people you're talking about, then you're not talking about a RallyRd scenario, which requires $11.50 to own part of a $10,000 comic.

Serious question:  Are you misunderstanding me on purpose?

I simply explained that short selling is something that can be done with comics.  I never in any way put my example in the context of this RallyRd site.  I specifically said that my example would only work on an entire comic, not on a fractional share.  In fact I specifically said it probably only works if two people agree on a specific copy of a particular book.  Because I don't think any buyer in their right mind would agree to buy a book sight unseen, giving the so-called short seller ample opportunity to find the cheapest book possible that he can argue meets the buyer's criteria.  That scenario would be a dispute waiting to happen.

I'm not misunderstanding you on purpose... I'm trying to put your comments into the context of this discussion, which is about RallyRd, and fractional ownership.  Now that you've clarified that you're completely off-topic, I guess I can now say, "I don't care, and that's off-topic." :kidaround:

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47 minutes ago, valiantman said:

The point of RallyRd.com is that the participants can't afford a $10,000 book.  Otherwise, they would buy it outright.  Your scenario has two people who can afford $10,000, and the RallyRd scenario has a share of CGC 9.0 Daredevil #1 for $11.50 (coming soon).  About a hundred people will take part in the $11.50 shares for probably around $115 (on average) each, and it's unlikely that anyone with $10,000 to spend will even bother to think twice about it.  BIg books for big players has always been the problem.  Big books for small players has always been an opportunity... a big one.

Yeah - but, as the previous poster said - not all 9.0s or 9.4s, or 9.8s, are equal - which also leads to price swings among even key books at the highest levels.

Here's an example: Conan # 1, CGC 9.6.

For the last four years, this book has consistently swung between $1,100 and $1,800 a copy per GPA (with other venues selling them as cheaply as $950), based on random timing but also on the quality of each individual book (white pages, centering/wrap, etc.).

Not sure I would trust Rally Rd. to buy on the low side -- or, more specifically, not to buy on the low side but then price at the average/high side in selling shares, inherent mark-up aside. (i.e., buy a $1,200 copy but sell the shares at an $1,800 valuation.)

Timing also plays into it.

Example: 

Doctor Solar # 1, CGC 9.4. 

After not having a GPA-recorded sale in nearly 3 years, back in 2012-2013 4 copies sold in just 14 months. I lost out because I was won the first copy, which was also the most expensive. Here were the sales:

  • April 2012: $1,575
  • July 2012: $1,315
  • Sept. 2012: $1,420
  • Jun. 2013 (Massachusetts Pedigree): $1,030

So how much is the book worth?

What was a $1,600 book in April was arguably worth only $1,350 by the following summer - probably less, given that the sole pedigree copy barely breached $1,000.

In a situation like this, RallyRd. would likely go after the first book (not knowing other sales were forthcoming), and sell 100 shares at $18 apiece, or a total $1,800 valuation.

And for the "investors," that'd be a stupid play.

It took another two years for a sale to establish a new $4,000 price point, and three years after that for that price level to be legitimized.with a $5,200+ sale.

Will this comics business model still be viable from this company six years from now? Maybe.

Do I want to risk my money now waiting to find out? No.

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8 minutes ago, Gatsby77 said:

In a situation like this, RallyRd. would likely go after the first book (not knowing other sales were forthcoming), and sell 100 shares at $18 apiece, or a total $1,800 valuation.

And for the "investors," that'd be a stupid play.

It took another two years for a sale to establish a new $4,000 price point, and three years after that for that price level to be legitimized.with a $5,200+ sale.

Will this comics business model still be viable from this company six years from now? Maybe.

Do I want to risk my money now waiting to find out? No.

Then the 24/7 exchange exists, we'll see key issue comic prices skyrocket.  There are MANY comics worth $1,000+ that I don't want to spend the full $1,000 to own.  I would, however, quickly spend $100 each to own a portion of 10 of them.  The reason comics are reaching certain prices and stopping, is that the pool of buyers drops as the price goes up.  Your example for Dr. Solar #1 is a perfect example.  The price fell quickly because the pool of buyers was probably 5 people.  Imagine if 50 people want Doctor Solar #1, and they're all willing to pay $100 for a percentage.  It would be $5,000 immediately.  What if the pool of buyers for a comic NEVER got any smaller?  What if the entry point for ANY comic was always $100?  Yes, there will be loser investments in such a system, but the thing we'll see most is that the significant books which were completely out-of-reach for the majority of collectors will absolutely skyrocket when everyone with $100 to spare can legitimately own a tiny piece of a real Action Comics #1.  That almost-destroyed Honus Wagner card on RallyRd (even without a 24/7 exchange) proves that people will happily pay far and away more than a card is worth... just to own a tiny bit of something that important.  

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28 minutes ago, valiantman said:

Your example for Dr. Solar #1 is a perfect example.  The price fell quickly because the pool of buyers was probably 5 people.

Maybe less.

IIRC, I bought the first copy, DocJoe bought two of the next three.

 

I see what you're saying but this isn't stocks - in that there's no inherent value in the shares.

Instead this business model seems predicated on fractional (cheaper) ownership having a broader pool of available buyers -- thus driving values up, to a point.

Sort of like...WeWork.

And we all see how that turned out...

Edited by Gatsby77
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2 hours ago, valiantman said:

Minimum investment at Masterworks.io is $10,000.  If you can afford to play around at that level, you can just buy Ditko and Kirby pieces outright.

Masterworks.io charges 1.5% management fee as well as a 20% commission on the piece when it sells.

I'm still trying to figure out if Rallyrd is putting up the money to buy the piece that the shares are being sold on.

 

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4 minutes ago, blazingbob said:

Masterworks.io charges 1.5% management fee as well as a 20% commission on the piece when it sells.

I'm still trying to figure out if Rallyrd is putting up the money to buy the piece that the shares are being sold on.

 

Based on the acquisition prices I assume they are. 27,000 for a 6.5 asm 1 is astronomically high. So my guess, they acquire for $19,000 or so (the going rate) then “sell” it to the share holders for 27,000 taking an 8k profit, and then the shareholders are the bagholders.

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2 hours ago, valiantman said:

I'm not misunderstanding you on purpose... I'm trying to put your comments into the context of this discussion, which is about RallyRd, and fractional ownership.  Now that you've clarified that you're completely off-topic, I guess I can now say, "I don't care, and that's off-topic." :kidaround:

Happy to let this little side topic drop as off-topic.  :foryou:

However, these earlier posts seemed to indicate that you found this side topic interesting enough to discuss here.  That's the only reason I offered my little thought experiment. 

4 hours ago, valiantman said:

Can you short sell a car? hm

4 hours ago, valiantman said:

If you believe in cars or comics as an investment, you can own a positive percentage in equity.  You can't sell a positive percentage of an item you don't own, nor a derivative short sale of that item.  The cars and comics do exist.  The fact that derivatives don't exist isn't a flaw.

Carry on ...

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25 minutes ago, jaybuck43 said:

Based on the acquisition prices I assume they are. 27,000 for a 6.5 asm 1 is astronomically high. So my guess, they acquire for $19,000 or so (the going rate) then “sell” it to the share holders for 27,000 taking an 8k profit, and then the shareholders are the bagholders.

Exactly. Overpaying by 20-40% is overpaying by 20-40%.

Doesn't matter if you're losing that percentage on $100 or losing that percentage on $20,000 - it's still a loss.

And without the book in hand, it's just money - so you might as well spend it on actual stocks instead.

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13 minutes ago, Gatsby77 said:

Exactly. Overpaying by 20-40% is overpaying by 20-40%.

Doesn't matter if you're losing that percentage on $100 or losing that percentage on $20,000 - it's still a loss.

And without the book in hand, it's just money - so you might as well spend it on actual stocks instead.

I literally _hate_ stocks. I have worked for companies with stock. They will ruin the lives of their workers for a 1 cent revenue difference.  The value of stocks is often 30, 50, or 100 times what they can make in a year.  Unless you hold it 30, 50, or 100 years, it's ALL overvalued. The fact that everyone agrees to overpay makes it seem "normal".  $100 in stocks makes me feel _nothing at all_.  $100 in Captain America #3 is pretty cool. If you think the next generations are going to spend their lives in the stock market, you might as well go for a stamp collection, too.  Impersonal  investments are playing music on the deck of the Titanic.

Edited by valiantman
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After doing some more reading it appears that RallyRd owns the books.

All of the assets are owned by our subsidiary company, RSE Collection, LLC or RSE Archive, LLC. When you invest in an asset, you become a shareholder in a specific sub-company that owns a specific asset.

While Masterworks.io charges a 20% commission at the time of sale it looks like Rallyrd.com might be front loading that commission/profit at the time they sell the shares. TMNT last 9.8 was $52K,  their price to "prospective buyers $65K)  I haven't seen anywhere that they are retaining any ownership in the book or if they can buy any of the shares in it.  

Both companies are offloading the risk of the asset onto the shareholders.  Masterworks.io seems to have a clearer "get out" strategy by stating that if an item doesn't sell after a certain number of years it will go to auction.  Not sure who the buyer of last resort would be on the rallyrd platform.

Edited by blazingbob
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4 minutes ago, catman76 said:

First it was encasing comics in plastic and never opening them, reading them or actually touching them ever and now you can buy comics you will never even have in your possession or ever even see in person. Insanity.

Right.  Whether it's stocks or collectibles, this kind of pure abstraction is the ultimate endpoint of speculation.  And part of that abstraction is that an increasingly small number of people truly understand exactly what it is that's being traded (or to put it another way, exactly what they're betting on).  That's when it really gets dangerous.

Edited by Sweet Lou 14
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6 hours ago, blazingbob said:

Selling shares in a book is basically the same idea as having co-owners.  You are spreading your risk around and expanding your capital base to buy more books. 

Are they paying the prices the books are listed at?  Or is it the same as venture capitalist bringing a IPO to market where they are setting the value of the book?  Hulk #1 8.0 $89000?  Star Wars #1 9.0 35 cent variant $12K,  last sale was $9600.  DD #1 $11,500,  last sale was $9900.

If they are setting the "comic IPO" price they are a bit in the high range so for buyers of these shares they are already underwater.

Bob

 

Sounds kind of like what a friend of mine did.   I've seen a variation of this move. 

Around ten years ago, this is how a friend of mine beat his wife at arbitration during their divorce.  They both agreed that he would pay child support and that they would sell the house and split the money.   He was a police officer and she was a teacher. 

He got her to agree to a term where the house would not be allowed to be sold under a certain amount as he was banking on housing prices to further decrease at the time.  He would remain in the house to maintain the upkeep and act as the custodian while they tried to find a seller.  In the meantime they would both share in the mortgage.  Housing prices continued to decrease.  People made offers on the house that were close to, but did not meet that certain amount.  In the meantime his wife began to struggle in paying for her half of the mortgage each month.  He would not relent.  

Finally she asked what would it take to sell the house at a lower price.  He had one term.   He would only agree to sell the house at a price lower than the amount determined in arbitration if he was the buyer.  She could not really afford to keep paying her share so she agreed and basically he took the house at a steep discount.  The kids now spend even more time with him since they have their original rooms and their house back.  

It's always kind of awkward at the larger BBQ's when they both show up independently from one another. 

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7 hours ago, Gatsby77 said:

If I'm going to "invest" in shares of a comic I'll never see and have little control over when I can sell (or buy more shares), I'm going with traditional ETFs or index funds that are far more liquid.

agreed

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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.

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