Any thoughts on Rally Rd? 1 1

[Aman619]

Reading the scary warnings in the legalese I kept substituting Apple Computer for Rally.  All of it pertained to Apple too in the beginning.  And Microsoft.  “We state that there is no guarantee that this thing will work out as planned!”  Duh 

[lou_fine]

On 3/9/2022 at 12:12 AM, tth2 said:

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).

Although I am sure that everybody here has their own opinions on this issue here, from my POV, this is the sign of a collector who has his priorities in the right order.  Especially in terms of being a loving and thoughtful family man who places his family's best interests in front of his own personal individualistic collecting interests.  

[lou_fine]

On 3/10/2022 at 7:55 AM, Aman619 said:

Reading the scary warnings in the legalese I kept substituting Apple Computer for Rally.  All of it pertained to Apple too in the beginning.  And Microsoft.  “We state that there is no guarantee that this thing will work out as planned!”  Duh 

Is this not the same fine print legalese that we used to see on the back of the CGC labels that there is no guarantee on the grade of the book, even though the company is called the Certified Guaranty Company (i.e. CGC)?    

Edited March 10, 2022 by lou_fine

[lou_fine]

On 3/10/2022 at 6:02 AM, Kryptic1 said:

Late last year they went to daily trading.  Now buy and sell orders are matched throughout the day rather than all at the end of the day.  The price you see at the end of the day is just the price of the last trade.  They have been adding 10-20 assets to daily trading each week.  Just about everything trades daily now, except for the recent IPOs.

Greatly appreciate all of your useful and insightful information here.  

So, my question here is how would they be able to determine the valuation or price on a book like this Bat 1 or any of the other older vintage collectible comic books since these types of books do not necessarily sell on a regular basis as they might come to market only a few times a year, if that?  Even less if you also have to factor in the condition of the book at the same time in oprder to come up with a more "accurate" value for the book.  

[Kryptic1]

On 3/10/2022 at 2:54 AM, tth2 said:

How transparent is the voting record, though?

Not very.  They send out an e-mail afterwards with the % voting for and against.  Recently there was a buyout of a TOS 39 in 9.4.  The offer was only 2% over the last traded price, so I thought there was no chance it would be approved.  The vote was 70/30 in favor of the buyout.  I asked for more details on what % voted for, against, or didn’t vote at all.  Rally doesn’t vote their own shares and I’m sure some people just don’t bother so your vote is weighted even more heavily than your actual % ownership.  They told me 66% of the shares were voted.  I owned 6.3% of it so my vote against the buyout counted for nearly 10% of the total and it still passed easily.

The worst part of it that buyouts are double-taxed.  They pay taxes on the gain at the “corporate” level and then we have to pay again on our gains after the distribution.  I’m sure most people don’t think about the tax implications and Rally does nothing to educate them.

[ThothAmon]

On 3/10/2022 at 11:36 AM, Kryptic1 said:

Not very.  They send out an e-mail afterwards with the % voting for and against.  Recently there was a buyout of a TOS 39 in 9.4.  The offer was only 2% over the last traded price, so I thought there was no chance it would be approved.  The vote was 70/30 in favor of the buyout.  I asked for more details on what % voted for, against, or didn’t vote at all.  Rally doesn’t vote their own shares and I’m sure some people just don’t bother so your vote is weighted even more heavily than your actual % ownership.  They told me 66% of the shares were voted.  I owned 6.3% of it so my vote against the buyout counted for nearly 10% of the total and it still passed easily.

The worst part of it that buyouts are double-taxed.  They pay taxes on the gain at the “corporate” level and then we have to pay again on our gains after the distribution.  I’m sure most people don’t think about the tax implications and Rally does nothing to educate them.

I remember clearly from reading disclosures that the principals can have a different cost basis than the other investors. So the incentive to sell would be different, n’est pas?  I wonder if the administrative/storage fees are shared equally split amongst the different classes of “owners”?

[Kryptic1]

On 3/10/2022 at 11:14 AM, lou_fine said:

Greatly appreciate all of your useful and insightful information here.  

So, my question here is how would they be able to determine the valuation or price on a book like this Bat 1 or any of the other older vintage collectible comic books since these types of books do not necessarily sell on a regular basis as they might come to market only a few times a year, if that?  Even less if you also have to factor in the condition of the book at the same time in oprder to come up with a more "accurate" value for the book.  

Most of the items they have are rare enough that there aren’t many comps.  They make a judgment call on what they think they can sell and at what price.  It isn’t much different from a dealer deciding what they’re willing to pay for a book and what they can sell it for, except the dealer is selling to one person and Rally is selling to a bunch of people.

[D84]

On 3/10/2022 at 10:09 AM, lou_fine said:

Is this not the same fine print legalese that we used to see on the back of the CGC labels that there is no guarantee on the grade of the book, even though the company is called the Certified Guaranty Company (i.e. CGC)?    

Which is why after cracking a few out, I learned what their grades are worth: Jack . 

[tth2]

On 3/11/2022 at 12:36 AM, Kryptic1 said:

The worst part of it that buyouts are double-taxed.  They pay taxes on the gain at the “corporate” level and then we have to pay again on our gains after the distribution.  I’m sure most people don’t think about the tax implications and Rally does nothing to educate them.

That's bizarre.  I would've thought that Rally would have set up with a LP structure to avoid this.

[tth2]

On 3/11/2022 at 6:25 AM, D84 said:

Which is why after cracking a few out, I learned what their grades are worth: Jack . 

Don't crack them out. 

[batman_fan]

On 3/10/2022 at 7:01 PM, tth2 said:

Don't crack them out. 

It leaves them in the plastic case or it gets the hose again

[D84]

On 3/10/2022 at 8:01 PM, tth2 said:

Don't crack them out. 

With honesty like that, I hope you aren't a seller. 

[adamstrange]

On 3/10/2022 at 11:09 AM, lou_fine said:

Is this not the same fine print legalese that we used to see on the back of the CGC labels that there is no guarantee on the grade of the book, even though the company is called the Certified Guaranty Company (i.e. CGC)?    

They guarantee that the number on the label is the subjective judgment of at least two of their employees who graded the book.   

[batman_fan]

On 3/10/2022 at 7:45 PM, adamstrange said:

They guarantee that the number on the label is the subjective judgment of at least two of their employees who graded the book.   

Well that's good enough for me

[lou_fine]

On 3/9/2022 at 11:56 AM, Kryptic1 said:

Be careful with the IPOs.  You will get much better results if you wait until they get into daily trading.  For example, 10 assets started trading this week for the 1st time since their IPOs.  Here are the % price changes from IPO price for all of them:

Unchanged, -57%, -59%, +24%, -38%, -55%, -61%, -9%, unch, -25%  

What were the 4 books that took an almost immediate hit of 55% to 61% right after their IPO?    

Any idea if they were GA books or more recent high flying overpriced BA or CA books, because that sure seems like a pretty big drop to take right off the bat which leads me to think that their IPO price must have been way out to lunch and completely unrealistic.  Not quite as bad as some of the former red hot flying growth stocks on the Nasdaq, but at least those took a few months to unwind themselves back down by 70% to 80% from recnt market highs.    

[Kryptic1]

On 3/11/2022 at 1:53 AM, lou_fine said:

What were the 4 books that took an almost immediate hit of 55% to 61% right after their IPO?    

Any idea if they were GA books or more recent high flying overpriced BA or CA books, because that sure seems like a pretty big drop to take right off the bat which leads me to think that their IPO price must have been way out to lunch and completely unrealistic.  Not quite as bad as some of the former red hot flying growth stocks on the Nasdaq, but at least those took a few months to unwind themselves back down by 70% to 80% from recnt market highs.    

Those 10 items are across all categories that they own.  Only the last two on that list are comics: Detective 58 CGC 8.0 (unch) and Silver Surfer 4 CGC 9.8 (-25%).

The 4 items that are down over 50% include: 2 NFTs - a bored ape and a set of curio cards, a Michael Jordan autographed basketball card, and a Donkey Kong 3 Nintendo game.

[lou_fine]

On 3/11/2022 at 5:25 AM, Kryptic1 said:

Only the last two on that list are comics: Detective 58 CGC 8.0 (unch) and Silver Surfer 4 CGC 9.8 (-25%).

With respect to the Silver Surfer 4, was that probably because the IPO price was set closer to the $90K high water mark that the book had hit back in the summer of 2021, or was the IPO offering price closer towards the high $60K's where it had sold for after that?  

[Kryptic1]

On 3/11/2022 at 2:11 PM, lou_fine said:

With respect to the Silver Surfer 4, was that probably because the IPO price was set closer to the $90K high water mark that the book had hit back in the summer of 2021, or was the IPO offering price closer towards the high $60K's where it had sold for after that?  

They paid $67k and marked it up to $80k.  A lot of the declines after IPO can be explained by people in the secondary market being unwilling to pay the markup and valuing things at the real FMV.  But it doesn’t explain why people keep rushing to buy the next IPO.  They sold out another IPO for an NFT today in minutes even though the two NFTs that started trading this week are down over 50%.  Are these the same people, or do they keep bringing in enough new users to replace the old ones who got burned?

[lou_fine]

On 3/11/2022 at 11:28 AM, Kryptic1 said:

They paid $67k and marked it up to $80k.  A lot of the declines after IPO can be explained by people in the secondary market being unwilling to pay the markup and valuing things at the real FMV.

Well, if they paid $67K for the Silver Surfer 4, then this must have been the copy that was auctioned off on CL for $67K back near the end of August.  

So, unlike the Larson Bat 1 in which they brought a 80% interest from the Goldin winner, this Silver Surfer 4 was brought directly from the CL auction.  Looks like the spread between their purchase price and their subsequent IPO offering price was more than enough to cover all of the admin and legal fees that would have been required to registered the book.  

Do you remember the purchase price for the TMNT 1 and the subsequent IPO offer price because if I remember correctly, the spread was a lot tighter and I simply couldn't figure out how they could cover the admin and legal fees with such a narrow margin on the spread?  Or were those first few books done at a loss in order to promote this new buy and sell concept at the time back then?     

[batman_fan]

As long as the market is moving up things will be okay but when people start seeing the value of their portfolio dropping is when the S hits the F.  I am a bit surprised they are doing NFTs given how volatile that market is and how easily it could tank the reputation of their company.