Any thoughts on Rally Rd? 1 1

[tth2]

On 3/8/2022 at 8:17 AM, jimbo_7071 said:

Another issue is, how liquid are those shares? If I want to sell a high-grade GA comic book, I can sell it. If I got into a bidding war and paid a lot, then I might take a loss, but I can find a buyer at some price. I wouldn't know how to go about trying to find a buyer for X shares of some book.

A very good point.  I would go into any investment in shares with the assumption that they're illiquid with pretty wide bid spreads. 

[lou_fine]

On 3/7/2022 at 1:55 PM, kimik said:

What I do find interesting, though, is that I received the notice about the CGC 8.0 Batman #1 from the Beckett Partner Services and all of the comics listed by Rally are CGC graded, not CBCS.  

I guess the same reason that Doug Schmell used for going with Heritage when it was time for him to dispose of his own personal collection.  

In other words, to maintain an air of independence and unbiasedness so that nobody can complain about a potential conflict of interest.  

[Aman619]

So many Rally Road questions this week. If only there was a boards member well seasoned at explaining the process! Undeterred by the cynicism of the naysayers.  Hmmm. What if??

[Cat-Man_America]

I thought this thread was about a new flavor of Ben & Jerry's ice cream.  It obviously isn't suited to everyone's taste.

[nearmint]

On 3/7/2022 at 7:00 PM, tth2 said:

They can.  I can't be bothered to see how the decision-making process is governed, but their assets can be sold off with the proceeds being distributed to stakeholders.  They've done that with sports cards they own.

Tim, what are your thoughts on this?  Legitimate investment, or are there warning signs that this should be avoided?

[batman_fan]

On 3/8/2022 at 8:04 AM, nearmint said:

Tim, what are your thoughts on this?  Legitimate investment, or are there warning signs that this should be avoided?

My opinion is it is a legitimate investment and as long as collectibles are going people can make money on it.  All of these partial “ownership” companies seem to sell at elevated prices and have high fees

[tth2]

On 3/8/2022 at 11:04 PM, nearmint said:

On 3/8/2022 at 11:00 AM, tth2 said:

They can.  I can't be bothered to see how the decision-making process is governed, but their assets can be sold off with the proceeds being distributed to stakeholders.  They've done that with sports cards they own.

Tim, what are your thoughts on this?  Legitimate investment, or are there warning signs that this should be avoided?

Jeff, I really haven't followed it too closely, to be honest, as I'm in divestment mode rather than accumulate mode these days.  I don't have the same knee jerk reaction against it that some here do, because I can understand why people would be interested in investing in collectibles that they can't individually afford. 

Whether Rally Rd is the right sponsor of such a scheme, I don't know enough about them to say.  But they do appear to have made decent money for some of their sports card investors.  

[alexgross.com]

theres a lengthy thread about this. 

 

[valiantman]

On 3/7/2022 at 11:02 PM, Aman619 said:

So many Rally Road questions this week. If only there was a boards member well seasoned at explaining the process! Undeterred by the cynicism of the naysayers.  Hmmm. What if??

No one wants to hear from people who have participated for years, made money, taken their profits anytime they felt like, and have had no problems whatsoever.

That's not what anyone wants to hear... especially not after they've warned everyone about RallyRd being all schemes and scams for all this time.

No one would want to hear it.

[Kryptic1]

I wrote the post quoted below in September about my experience with Rally.  Not much has changed since then.  I’m starting to see more grumbling about the high IPO prices.  They are now heavily advertising the Batman #1 that they are bringing to market at 25% over the price it just sold for at auction in September.  Most of the recent IPOs have tanked when they started trading daily.  Rally has also shown a knack for buying things at the worst possible time.  They have a lot of Pokémon cards and video games bought at the top of the market that are down over 50%.

The liquidity seems to be getting worse as they add more assets.  If you’re buying a few shares as a novelty you should have no problem getting out, but if you own even 2% of something you won’t be able to get out quickly without a fire sale.

There are a lot of assets outside of the comic category trading below market value, so there’s still money to be made if you avoid the IPOs and are in it for the long haul.

 

On 9/2/2021 at 1:37 PM, Kryptic1 said:

Here's my experience with Rally.  I first learned about them through the thread in the General forum, and I really liked the idea of fractional investing, but I thought Rally's approach added too many expenses that would ultimately have to come out of investor returns.  I didn't plan to invest, but I watched as most of the comics were dropping in their secondary trading windows, and figured that the discount that I was getting to market value would offset those costs.  I deposited my money and started to buy up any comics that had fallen well under FMV.  I was watching the same comics climb higher and higher at auction, but on Rally they kept dropping.  In the Rally threads on Twitter, people were declaring "comics are dead!" because all they knew about the market was what they saw on Rally.  I kept buying, assuming that people would eventually catch on and bid the books back up to FMV.

Then the buyout offers started to come in.  When I joined Rally, I wasn't too concerned about the lack of control over the timing of the sale.  I assumed most shareholders would make rational decisions and since Rally makes the final decision on buyouts they could overrule the shareholders if necessary.  I couldn't have been more wrong.  The first offer was for Amazing Fantasy 15 in CGC 8.0 at $240k.  Days earlier, a copy in the same grade had sold on the Comiclink Exchange for $300k.  I reached out to Rally and asked why they would even consider such a low offer.  They responded that they would present all "qualified" offers to shareholders.  I also offered to buy up all shares from those who wanted to accept the offer so that anyone who wanted to stay in long-term could do so, but I got no response.  The offer was approved by over 80% of shareholders.  Rally had bought the book for $189k and it was worth $300k at the time of the sale.  That market had risen by 59%, but if you had invested at the IPO price, the combination of accepting a lowball offer and all of the expenses added by Rally had whittled your return down to 15% pretax.

So far, six of the nine books that I invested in have been bought out, all well below market prices.  Since I was buying during the trading windows below the IPO price my returns have been very good, but at the expense of the opportunity for future gains.  Most of the books worth investing in are gone, and they have been replaced by high population bronze age keys bought at the top of the market, like Giant Size X-Men #1 in CGC 9.8 for $64k or Amazing Spiderman 129 in CGC 9.8 for $40k.  The market value for the new books are down 30-40% from where Rally bought them, but Rally investors, convinced that "comics are hot!!!!" by all of the buyouts, are buying everything in sight.  I've been withdrawing my money since there isn't much left worth buying.

I don't regret using Rally, and I'm not concerned that it's all a scam.  My withdrawals have been processed quickly, and I just don't think they've put in all of this work over the last few years to run a smash & grab job on customer deposits.  Just understand if you buy in that your fellow shareholders and Rally know nothing about comics, and you are at their mercy when decisions are made.

 

[lou_fine]

On 3/8/2022 at 8:27 AM, Kryptic1 said:

Rally has also shown a knack for buying things at the worst possible time.  They have a lot of Pokémon cards and video games bought at the top of the market that are down over 50%.

Did you also buy into their CGC 9.8 graded copy of TMNT 1 at the time for something like $65K or thereabouts?  That one there should have done alright if they held onto it for awhile or did they end up reselling it before the big spikeup to a quarter of million dollars on this same book?  

 

On 3/8/2022 at 8:27 AM, Kryptic1 said:

Then the buyout offers started to come in.  When I joined Rally, I wasn't too concerned about the lack of control over the timing of the sale.  I assumed most shareholders would make rational decisions and since Rally makes the final decision on buyouts they could overrule the shareholders if necessary.  I couldn't have been more wrong. 

Yes, when I was reading the initial thread on this back in 2020, the concern which I had at the time was the lack of control over when and how the book was going to be resold back into the marketplace.  

 

On 3/8/2022 at 8:27 AM, Kryptic1 said:

Most of the books worth investing in are gone, and they have been replaced by high population bronze age keys bought at the top of the market, like Giant Size X-Men #1 in CGC 9.8 for $64k or Amazing Spiderman 129 in CGC 9.8 for $40k.  The market value for the new books are down 30-40% from where Rally bought them, but Rally investors, convinced that "comics are hot!!!!" by all of the buyouts, are buying everything in sight.

So, are you saying any of the stupefying mind numbing prices that we see for rather common BA books are the ones that have been brought by these know nothing incompentent buyers from Rally and possibly some of the other fractional share companies?  Almost makes me wonder if they were the ones who brought the Marvel Spotlight 5 for some $264K, and if so, then Heritage and Halperin must have these guys on speed dial when one of these big BA books comes up for sale.    

Edited March 8, 2022 by lou_fine

[lou_fine]

On 3/8/2022 at 7:27 AM, tth2 said:

Jeff, I really haven't followed it too closely, to be honest, as I'm in divestment mode rather than accumulate mode these days. 

Tim;

FWIW, I think you are still way too young to be in full blown divestment mode already.  

[Kryptic1]

They sold the TMNT 1 after the spike for a pre-spike price.  They sold for $100k then less than a month later Otis (another fractional ownership company) sold theirs for just under $200k.

I wouldn’t say these companies are a significant driver in the market.  There’s maybe a few dozen comics spread across all of the companies.  Rally is trying to make a big splash with this Batman 1, and I think they’re going to have a lot of trouble filling the IPO and that could affect how aggressive they are in the future.
 

On 3/8/2022 at 1:28 PM, lou_fine said:

Did you also buy into their CGC 9.8 graded copy of TMNT 1 at the time for something like $65K or thereabouts?  That one there should have done alright if they held onto it for awhile or did they end up reselling it before the big spikeup to a quarter of million dollars on this same book?  

 

 

So, are you saying any of the stupefying mind numbing prices that we see for rather common BA books are the ones that have been brought by these know nothing incompentent buyers from Rally and possibly some of the other fractional share companies?  Almost makes me wonder if they were the ones who brought the Marvel Spotlight 5 for some $264K, and if so, then Heritage and Halperin must have these guys on speed dial when one of these big BA books comes up for sale.    

 

[lou_fine]

On 3/8/2022 at 11:10 AM, Kryptic1 said:

They sold the TMNT 1 after the spike for a pre-spike price.  They sold for $100k then less than a month later Otis (another fractional ownership company) sold theirs for just under $200k.

Any idea where and how companies like Rally and Otis are reselling their books since it seems that they buy them through the public comic book auction sites, but not sure if they are using them when it comes time to sell the books?  

[Kryptic1]

On 3/8/2022 at 2:29 PM, lou_fine said:

Any idea where and how companies like Rally and Otis are reselling their books since it seems that they buy them through the public comic book auction sites, but not sure if they are using them when it comes time to sell the books?  

Anyone can make an offer through their app, but they never disclose the buyer.  It caused a bit of a stir last year when 4 of the comics bought out over the summer showed up in the Goldin September auction.  Ken Goldin is a member of Rally’s advisory board, and I think they should be disclosing it if the offer is coming from someone affiliated with the company.

[ThothAmon]

On 3/8/2022 at 2:54 PM, Kryptic1 said:

Anyone can make an offer through their app, but they never disclose the buyer.  It caused a bit of a stir last year when 4 of the comics bought out over the summer showed up in the Goldin September auction.  Ken Goldin is a member of Rally’s advisory board, and I think they should be disclosing it if the offer is coming from someone affiliated with the company.

When I read the fine print to the sec disclosures and user agreement it was apparent that the general partner was in a much different position than the retail shareholders. Think when the music stops their chair is a lot easier to get to than yours. The potential for shenanigans was too high for my investment dollars. Sales prices have generally been going up so to what extent fractional ownership and hedge fund companies have manipulated our little market is not yet clear. 

[lou_fine]

On 3/8/2022 at 12:21 PM, ThothAmon said:

The potential for shenanigans was too high for my investment dollars. Sales prices have generally been going up so to what extent fractional ownership and hedge fund companies have manipulated our little market is not yet clear. 

Not sure why you would be so concerned with the fractional ownership companies and hedge funds when the same potential for shenanigans exist with the comic book auction houses or possibly even in the old days with dealer to dealer transactions?  

As I have alluded to before, wouldn't a more recent book like TMNT 1 which is available in uber HG in relatively ready availability and also recent enough for an astute dealer(s) to acquire multiple copies be an ideal candidate for possible manipulation.  Especially interesting since CGC 9.8 graded copies of this book have moved up rather parabolically from the mid/high $30K's up to a quarter of million dollars in something like only a short 2-year time period.    

[tth2]

On 3/9/2022 at 3:04 AM, lou_fine said:

Tim;

FWIW, I think you are still way too young to be in full blown divestment mode already.  

Dean, it’s not the money, but as I alluded to in another thread, I don’t want to burden my family with the hassle of dealing with packing and selling my collection ( and potentially getting fleeced) if I suddenly kick the bucket or get incapacitated.  I’m in good health currently, but I saw from my Dad how quickly one’s health can deteriorate.  So I’m determined to get ahead of the curve while I can still do the heavy lifting (literally).

[tth2]

On 3/9/2022 at 12:27 AM, Kryptic1 said:

I wrote the post quoted below in September about my experience with Rally.  Not much has changed since then.  I’m starting to see more grumbling about the high IPO prices.  They are now heavily advertising the Batman #1 that they are bringing to market at 25% over the price it just sold for at auction in September.  Most of the recent IPOs have tanked when they started trading daily.  Rally has also shown a knack for buying things at the worst possible time.  They have a lot of Pokémon cards and video games bought at the top of the market that are down over 50%.

The liquidity seems to be getting worse as they add more assets.  If you’re buying a few shares as a novelty you should have no problem getting out, but if you own even 2% of something you won’t be able to get out quickly without a fire sale.

There are a lot of assets outside of the comic category trading below market value, so there’s still money to be made if you avoid the IPOs and are in it for the long haul.

 

 

Thanks for the insights, very interesting.  
 

How does the buyout decision making process work.  Is it simple majority vote, one share one vote?  Does Rally or some other administrator or management entity have super voting rights?

[EastEnd1]

Well, decided to take the plunge and just subscribed to a whopping 20 shares in the Larson Batman #1!  I will be a 1/1000th percent owner... very exciting!  Cost me $175 net of the CGC gift coupon of $25!  Decided to buy 20 shares in the Erling Haaland rookie card while I was at it.  Have to say, the site was very user friendly and the process was very easy and seemed very professionally managed.  We'll see.  In light of all the recent Wall Street interest in NFTs and "alternative assets", I'm very curious as to where this form of investment goes.