Kryptic1

Take

Take

Take

Another problem is that there’s very little trading volume on the comics. If you buy a significant chunk of a comic, you can’t get out of it without taking a big hit on the current market value. They had a CGC 9.4 Tales of Suspense 39 trading today. It started the day at $159k. When I checked around noon, it was at $282k, up over 70% on the day and more than double the IPO price. Great! The people who bought early can cash in big, right? Nope. The highest bid was for one share at a $180k value. The next bid was for one share at a $165k value. Then one share at $159k. Then 30 shares at $3k (not a typo). Where did it end the day? At $132k, down 17%. When you look at the bid history, a lot of the transactions are for one or two shares. Prices are moving up by tens and sometimes hundreds of thousands of dollars based on a tiny number of shares trading hands. The Buzz Aldrin joystick mentioned a couple pages ago started at $300k on Tuesday, was up over $700k early in the day, and ended under $300k.

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.

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’ll take it

Frank Kadar

Also, I can’t even tell from their website exactly who it is that we’re trusting with complete control over the sale. Is this a dealer or collector with decades of experience or some dude with a GPA subscription? All I can find is a vague comment about having “industry experts” on staff. They currently have listings for exotic cars, watches, purses, sports cards, non-sports cards, sports memorabilia, historical artifacts, video games, books, comics, and wine. Do they have experts in all of these categories? Do they understand all market segments within those categories?

RallyRd has the Bethlehem copy of ToS 39 listed as coming soon. It’s a CGC 9.4 and they have the value at $135k. A non-pedigree 9.4 sold on Heritage last month for $99k. Good luck with that.

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.

Once the trading platform is up and running, when would it ever make sense for the shareholders to agree to sell the underlying asset? Using the Jordan card as an example, if the card is worth $80k making each share worth $80, why would I agree to liquidate at $71 per share when I can sell on the exchange for $80? If the shares trade at a premium to asset value, it makes even less sense. The Jordan holders had to take $71 because there is currently no other way to sell. And if the assets are never sold and RallyRd can’t take their cut of the sale, how do they pay their operating expenses?