My experience with fractional ownership of comics: JIM #83 / $215,000
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444 posts in this topic

13 minutes ago, valiantman said:

Sure, but "scam" is an opinion and accusation.  After the fact, anyone can diagnose a problem. 

What's the current problem here?  I own $60 worth of an Apollo 11 joystick used by Buzz Aldrin.  I could have sold for $120 on Tuesday of this week.  Am I being scammed by holding?

Should I have waited until I could afford the whole $600,000 joystick outright?

You should do what you want.  

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1 minute ago, batman_fan said:
15 minutes ago, valiantman said:

Sure, but "scam" is an opinion and accusation.  After the fact, anyone can diagnose a problem. 

What's the current problem here?  I own $60 worth of an Apollo 11 joystick used by Buzz Aldrin.  I could have sold for $120 on Tuesday of this week.  Am I being scammed by holding?

Should I have waited until I could afford the whole $600,000 joystick outright?

You should do what you want.  

You say it's a scam.  How?  You wanted to be heard... well, I'm listening.  Does the guy with the sandwich board in Times Square that says "THE END IS NEAR" actually want a dialogue?

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On 1/9/2021 at 7:57 AM, thehumantorch said:

Well, I figured why not toss $20 on a key just to see how it works.  There's no option to enter a non us state or non us postal code.

Your money is no good here. You already get free Health Care. Quit while you're ahead.

Hmmm hm Since investors outside the US are unable to get in mayhap I'll start a Comic Broker business and invest $20.00 for you....for a modest $4.00 transaction fee.

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1 hour ago, valiantman said:

Bitcoin is currently 3 times its peak from 2017.  High in 2017 was $17,000.  Current = $51,000.

The article I pulled that out of might not have been current. It doesn't matter, bitcoin has done fabulously and has now been around a long time, Why? I have no idea.

 

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1 hour ago, valiantman said:

Someone else selects your books?  That's worse than this concept.  If I want $100 in FF #1 and $500 in AF #15, I just do that.  If someone else manages the fund, they might decide to go in heavy on Red Ryder.

I forget, do you own a piece of this company?

I am more thinking that owning a fraction of a $90K asset seems odd. It isn't much of an asset for this sort of ownership.

Owning a piece of a $10 million portfolio of these high end keys seems different. 

Or even a piece of a $2 million book.

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6 minutes ago, the blob said:
2 hours ago, valiantman said:

Someone else selects your books?  That's worse than this concept.  If I want $100 in FF #1 and $500 in AF #15, I just do that.  If someone else manages the fund, they might decide to go in heavy on Red Ryder.

I forget, do you own a piece of this company?

I am more thinking that owning a fraction of a $90K asset seems odd. It isn't much of an asset for this sort of ownership.

Owning a piece of a $10 million portfolio of these high end keys seems different. 

Or even a piece of a $2 million book.

No, I don't own any part of RallyRd.  I had the same idea 20 years ago, but the amount of legal, capital, technology, access, and marketing it would take was far beyond what I could do in my spare time.

The idea is simple at its core.

I can put $100 into any company via stock and benefit when the value rises, but I can't put $100 into Amazing Fantasy #15 and benefit when the value rises.  Why not?

RallyRd may not be the full answer, and for all I know, it may be a "scam", but they'd done more with legal, capital, technology, access, and marketing than I was able to do in the last 20 years. 

I've had a thousand ideas, but the biggest ones were always going to take someone else to accomplish.

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1 minute ago, valiantman said:

The idea is simple at its core.

As a comic book collector how can I do anything but respect your decision to put a small amount of your investment funds into this. It does look fun but at its core I can’t help but feel you are set up for losses. Here’s why. The asset is fractionalized by Rally Rd at some price higher than they have contracted to buy the asset for. Once the fractional shares are “sold out” Rally Rd then exercises the option to purchase the asset and takes possession of it. Rally Rd apparently has “purchased” or owns some unknown percentage more than 50% of the fractionalized shares. The only party really paying the initial fractionalized share price are the retail buyers. Rally Rds share price will be substantially below the retail buyers price.  Made more so with every share sold at the offer price.   Does anything stop Rally Rd from selling their shares on the monthly sales date?  Are they required to keep over 50% of each assets shares?  Just strikes me that any gravy from these assets will be soaked up by Rally Rd.

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14 minutes ago, ThothAmon said:

As a comic book collector how can I do anything but respect your decision to put a small amount of your investment funds into this. It does look fun but at its core I can’t help but feel you are set up for losses. Here’s why. The asset is fractionalized by Rally Rd at some price higher than they have contracted to buy the asset for. Once the fractional shares are “sold out” Rally Rd then exercises the option to purchase the asset and takes possession of it. Rally Rd apparently has “purchased” or owns some unknown percentage more than 50% of the fractionalized shares. The only party really paying the initial fractionalized share price are the retail buyers. Rally Rds share price will be substantially below the retail buyers price.  Made more so with every share sold at the offer price.   Does anything stop Rally Rd from selling their shares on the monthly sales date?  Are they required to keep over 50% of each assets shares?  Just strikes me that any gravy from these assets will be soaked up by Rally Rd.

I don’t think it’s correct that RallyRd owns more than 50% of each asset.  They mention on the website that they own some % of each asset, but I think the confusion is coming from the selling process.  Owning shares gives you no control over whether the asset is sold and for how much.  RallyRd has 100% control of that regardless of what % of the shares they own.  They take a vote of the shareholders, but they aren’t bound by the result of the vote.

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22 minutes ago, ThothAmon said:

As a comic book collector how can I do anything but respect your decision to put a small amount of your investment funds into this. It does look fun but at its core I can’t help but feel you are set up for losses. Here’s why. The asset is fractionalized by Rally Rd at some price higher than they have contracted to buy the asset for. Once the fractional shares are “sold out” Rally Rd then exercises the option to purchase the asset and takes possession of it. Rally Rd apparently has “purchased” or owns some unknown percentage more than 50% of the fractionalized shares. The only party really paying the initial fractionalized share price are the retail buyers. Rally Rds share price will be substantially below the retail buyers price.  Made more so with every share sold at the offer price.   Does anything stop Rally Rd from selling their shares on the monthly sales date?  Are they required to keep over 50% of each assets shares?  Just strikes me that any gravy from these assets will be soaked up by Rally Rd.

Excellent analysis. But I'd add a few key points from the prior Rally Rd. thread:

1) The fine print says your share doesn't actually entitle you to any of the underlying asset. It's like a mortgage-backed security, but here you don't have any claim to the mortgage, 1/1000th or not.

2) In at least one case (I believe the Michael Jordan rookie card), Rally Rd. itself bought it. So in that situation, Rally Rd. was a) was the majority share owner (thus majority seller), b) set the share price, and c) was the ultimate buyer. That's a great gig if you can get it, and not suspicious *at all.*

3) The IPO price is always 20-30% above FMV. Just because you divvy something up into 1,000 cheaper units doesn't magically make the total worth more. Just ask WeWork.

4) As Bob Storms put it so eloquently, "If I'm splitting the cost of a book, I'm putting my co-investors in at the wholesale price, not the retail (+20%) price."

5) Because each individual comic is set up as a separate entity, it's possible for Rally Rd. to declare bankruptcy *just on that particular comic* and underpay its investors - without endangering Rally Rd. as an overall entity at all.

6) It was clear from at least three of the SEC documents that Rally Rd. "bought" the comic from Metro at just 20% down, with a promise to pay the balance out of IPO proceeds later. So in effect, the IPO "investors" are just subsidizing Rally Rd.'s purchase, separate and apart from their 20%+ mark-up on the initial share-price. 

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10 minutes ago, Kryptic1 said:

I don’t think it’s correct that RallyRd owns more than 50% of each asset.  They mention on the website that they own some % of each asset, but I think the confusion is coming from the selling process.  Owning shares gives you no control over whether the asset is sold and for how much.  RallyRd has 100% control of that regardless of what % of the shares they own.  They take a vote of the shareholders, but they aren’t bound by the result of the vote.

I don't recall if I read the specific "controlling interest" (i.e., 50%+) in the fine print months ago or not.

But if this were legit, you should be able to buy 501 of the shares at IPO and then force a sale yourself. Or even simply buy the book outright by buying 100% of the shares from the jump. It was clear from the fine print that neither of those scenarios was possible. Again, the buyers have no underlying claim to the book.

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4 minutes ago, Gatsby77 said:

I don't recall if I read the specific "controlling interest" (i.e., 50%+) in the fine print months ago or not.

But if this were legit, you should be able to buy 501 of the shares at IPO and then force a sale yourself. Or even simply buy the book outright by buying 100% of the shares from the jump. It was clear from the fine print that neither of those scenarios was possible. Again, the buyers have no underlying claim to the book.

I think this is the situation they’re trying to avoid.  One person or a group of people owning 51% of a book and voting to sell it to themselves for $1 and cheating all of the other investors.

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31 minutes ago, Gatsby77 said:

4) As Bob Storms put it so eloquently, "If I'm splitting the cost of a book, I'm putting my co-investors in at the wholesale price, not the retail (+20%) price."

He could put RallyRd out of business immediately.  Does he do this now?  Does he do this for $100 at a time?  No? 

Then I'll say that I am planning to split the cost of books and put my co-investors in at a 50% discount to the GPA for any investment amount even $1.

When will I be doing this?  Doesn't matter.  I get credit just for saying it.

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50 minutes ago, Gatsby77 said:

2) In at least one case (I believe the Michael Jordan rookie card), Rally Rd. itself bought it. So in that situation, Rally Rd. was a) was the majority share owner (thus majority seller), b) set the share price, and c) was the ultimate buyer. That's a great gig if you can get it, and not suspicious *at all.*

I was part of that one.  RallyRd offered Michael Jordan rookie card PSA 10 for $40,000, because that was the market price at the time.  Sales had occurred over $70,000 between the time RallyRd contracted for $40,000 and the time of the IPO.  Did RallyRd cancel the IPO and reprice at $70,000?  Nope.  They offered the card for $40,000.  I got $200 worth in 5 shares for $40 each.  Because the market had already shown sales above $70,000 they got an outside offer above $70,000 and asked the shareholders to vote whether they would accept $71.64 for their $40 shares purchased the same month. I voted "No" because I would have preferred to have 0.5% of the card than the cash.

More than 50% voted yes, and the card was sold with $71.64 paid out for each share.  I got $358.20.  The card kept rising and is worth a lot more now.  If I could have purchased a PSA 10 Jordan rookie for $40,000 outright, I would have done it.  I also would not have sold it for $71,640 net.  But I owned 0.5% and my opinion wasn't enough... so I "only" got a 79% gain after one month.  It doesn't matter to me who owned the other 99.5% of the card, whether it was one guy or one thousand.  I was forced to accept a 79% gain.

That's what I signed up for.  I guess I got "scammed".

Edited by valiantman
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2 hours ago, ThothAmon said:
3 hours ago, valiantman said:

The idea is simple at its core.

As a comic book collector how can I do anything but respect your decision to put a small amount of your investment funds into this. It does look fun but at its core I can’t help but feel you are set up for losses. Here’s why. The asset is fractionalized by Rally Rd at some price higher than they have contracted to buy the asset for. Once the fractional shares are “sold out” Rally Rd then exercises the option to purchase the asset and takes possession of it. Rally Rd apparently has “purchased” or owns some unknown percentage more than 50% of the fractionalized shares. The only party really paying the initial fractionalized share price are the retail buyers. Rally Rds share price will be substantially below the retail buyers price.  Made more so with every share sold at the offer price.   Does anything stop Rally Rd from selling their shares on the monthly sales date?  Are they required to keep over 50% of each assets shares?  Just strikes me that any gravy from these assets will be soaked up by Rally Rd.

That's definitely a potential outcome, but every project with a long-term focus probably has some short-term way to cash out and walk away.  Who do you trust?

If RallyRd set up a system to make the customers lose, they wouldn't have any for very long.  So, there's a chance "any gravy from these assets will be soaked up by RallyRd" and that's a risk.  But they're going through an awful lot of trouble with the website building, the SEC filings, the contracts, the LLCs, the advertising, and if they need my $200 to walk away happy and shut it all down from loss of customer trust, then I guess I'll lose it.

On the other hand, they paid me $358.20 for my $200 investment on Michael Jordan PSA 10.  They probably soaked up most of the gravy, but I got some, and I didn't have to do any of the website building, SEC filings, contracts, LLCs, or advertising. 

When someone else does all the work, you pay more.  If I want an 8oz filet mignon cooked medium rare, I don't just pay for 8 ounces of a cow's total weight before it goes to the butcher.  When the premium is too high, I won't pay... but 20% does not bother me here, and some have been more like 5%.

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4 hours ago, the blob said:

The article I pulled that out of might not have been current. It doesn't matter, bitcoin has done fabulously and has now been around a long time, Why? I have no idea.

 

Mainstream adoption is occurring in significant part due to the reduced transaction fees.  Credit cards, PayPal, etc. charge a percentage of the value being sent as their fee.  Bitcoin's fees are based on the amount of data being sent, and it sounds like the sender has actual input into the amount of that fee:

How Bitcoin Transaction Fees Are Determined | Buy Bitcoins (buyabitcoin.com.au)

Sending $10,000 from one place to another for, say, a $20 cost sure beats sending that $10,000 through PayPal for a roughly $300 cost.

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3 hours ago, valiantman said:

I was part of that one.  RallyRd offered Michael Jordan rookie card PSA 10 for $40,000, because that was the market price at the time.  Sales had occurred over $70,000 between the time RallyRd contracted for $40,000 and the time of the IPO.  Did RallyRd cancel the IPO and reprice at $70,000?  Nope.  They offered the card for $40,000.  I got $200 worth in 5 shares for $40 each.  Because the market had already shown sales above $70,000 they got an outside offer above $70,000 and asked the shareholders to vote whether they would accept $71.64 for their $40 shares purchased the same month. I voted "No" because I would have preferred to have 0.5% of the card than the cash.

More than 50% voted yes, and the card was sold with $71.64 paid out for each share.  I got $358.20.  The card kept rising and is worth a lot more now.  If I could have purchased a PSA 10 Jordan rookie for $40,000 outright, I would have done it.  I also would not have sold it for $71,640 net.  But I owned 0.5% and my opinion wasn't enough... so I "only" got a 79% gain after one month.  It doesn't matter to me who owned the other 99.5% of the card, whether it was one guy or one thousand.  I was forced to accept a 79% gain.

That's what I signed up for.  I guess I got "scammed".

Definitely a bummer now considering Goldin sold one for like 700k.

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16 minutes ago, DocHoppus182 said:

Definitely a bummer now considering Goldin sold one for like 700k.

Yes, but people without the full $40,000 to invest always got nothing from these increases, throughout the history of this market. 

If you couldn't afford to play, you must sit out and watch others.  RallyRd let me play for as little as $40, just for a few weeks, and I won 79%.

I could barely get any other $40 Michael Jordan card I might have bought "outright" shipped to me, listed for auction, sold, and shipped out in the same timeframe... and I still wouldn't have netted $79.

Edited by valiantman
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