Any thoughts on Rally Rd? 1 1

[sfcityduck]

On 1/27/2023 at 8:09 AM, tth2 said:

Can someone remind me what Rally Road pay for it?

Here's the relevant numbers:

* 9.4 sold for $2.2M in Jan. 2021 through Heritage.  

* Goldin bought 8.0 for $1.4M in Sept. 2021.

* Initial offering amount was $1.8M for 8.0 in Nov. 2022.   

This is a guess as to what happened here:

* Goldin bought for 8.0 $1.4M;

* Goldin allows Rally to list 8.0 for $1.8 with Goldin retaining a sizable chunk of the value (probably @ 50% $900K);

* Small investors by the remaining chunk (probably @ 50% $900K);

* With $2M selling price Goldin ends up making a total net profit of $300K (21%) off a $1.4M cash outlay (could be less if there are fees and costs);

* Investors make $100K (11%) off of a $900K cash outlay (could be less if there are fees and costs); and

* The buyer of the book gets an 8.0 for $2M when $2.2M bought the 9.4 just two years ago.

Edited January 27, 2023 by sfcityduck

[lou_fine]

On 1/27/2023 at 8:09 AM, tth2 said:

Can someone remind me what Rally Road pay for it?

The person that really made a killing on this transaction here percentage wise and good for them if it does go through in the end is the Goldin purchaser who ends up making over 200% on his net outlay for the book in just 16 short months after buying the Larson Batman 1 off Goldin for a "mere" $1.47M.    

Edited January 27, 2023 by lou_fine

[lou_fine]

Any bets that the consignor of this copy of Bat 1 that sold for only $552K  a short 2 weeks ago is really wishing this Rally Road transaction at $2M had taken place first:  

https://comics.ha.com/itm/golden-age-1938-1955-/batman-1-dc-1940-cgc-fn-60-off-white-pages/a/7338-91028.s?ic4=ListView-ShortDescription-071515

[lou_fine]

On 1/27/2023 at 8:09 AM, tth2 said:

Can someone remind me what Rally Road pay for it?

Well, according to @Kryptic1's post below, it's really quite straightforward in that Rally paid $1.34M for 80% of the Larson copy of Bat 1:  

 

On 3/9/2022 at 1:33 PM, Kryptic1 said:

Rally bought 80% of the Larson 8.0 for $1.34M from the person who won the auction in September.  The previous owner retained the other 20% so they will own 20% of the shares if Rally can fill the IPO.  

Although it's a little bit of going through a mathematical maze to figure out who really came out on top in this transaction and it clearly was not Rally Road.  Especially since 80% of the total $2M sales result would leave them with only $1.6M for their cut or a GROSS profit of only $260K and who knows what the net would be after factoring out all of the ancillary legal and admin costs of running a share ownership plan.  

Completely different case for the Goldin winner at $1.47M who then flips out a 80% portion to Rally for $1.34M leaving him with a 20% stake at a net cost of only $130K for the Larson Bat 1.  His 20% cut of the $2M sales result works out to $400K which then leaves him with a net profit of $270K (with no major ancillary costs) on his initial net outlay of only $130K after a 16-month partial ownership of the book.  Not too bad of an ROI and very astute or fortunate that it all worked out for him in the end.    

[Kryptic1]

On 1/28/2023 at 2:38 PM, lou_fine said:

Well, according to @Kryptic1's post below, it's really quite straightforward in that Rally paid $1.34M for 80% of the Larson copy of Bat 1:  

 

Although it's a little bit of going through a mathematical maze to figure out who really came out on top in this transaction and it clearly was not Rally Road.  Especially since 80% of the total $2M sales result would leave them with only $1.6M for their cut or a GROSS profit of only $260K and who knows what the net would be after factoring out all of the ancillary legal and admin costs of running a share ownership plan.  

Completely different case for the Goldin winner at $1.47M who then flips out a 80% portion to Rally for $1.34M leaving him with a 20% stake at a net cost of only $130K for the Larson Bat 1.  His 20% cut of the $2M sales result works out to $400K which then leaves him with a net profit of $270K (with no major ancillary costs) on his initial net outlay of only $130K after a 16-month partial ownership of the book.  Not too bad of an ROI and very astute or fortunate that it all worked out for him in the end.    

A few things to add here:

1. Rally’s SEC filings list the owners of at least 10% of any item.  Their latest filing shows that the owner of the retained equity for the Batman #1 is….Ken Goldin.  So either he won his own auction or he bought the book from the auction winner before the transaction with Rally.

2. The IPO ended with about 30% of the shares unsold, and Rally bought the remainder.  So Rally & Goldin own half of the book and individual shareholders own the other half.

3. This is another great example of how much of the gains in fractional ownership are eaten up by fees and taxes.  The original auction price at Goldin was $1.47M.  The markup paid to the prior owner, fees paid by Rally, and Rally’s markup brought the cost up to $1.8M.  The $2.0M sale price is an 11.1% gain from the IPO price, but the corporate tax paid by Rally brings the net payout down to a 7.6% gain.  Then the investors will pay short-term capital gains tax on the net, which will bring their gain down to 4-6% depending on their tax rate.  They end up with a small gain, and the big winners are Ken Goldin, Rally, and Uncle Sam.

[sfcityduck]

On 1/28/2023 at 7:49 PM, Kryptic1 said:

A few things to add here:

1. Rally’s SEC filings list the owners of at least 10% of any item.  Their latest filing shows that the owner of the retained equity for the Batman #1 is….Ken Goldin.  So either he won his own auction or he bought the book from the auction winner before the transaction with Rally.

2. The IPO ended with about 30% of the shares unsold, and Rally bought the remainder.  So Rally & Goldin own half of the book and individual shareholders own the other half.

3. This is another great example of how much of the gains in fractional ownership are eaten up by fees and taxes.  The original auction price at Goldin was $1.47M.  The markup paid to the prior owner, fees paid by Rally, and Rally’s markup brought the cost up to $1.8M.  The $2.0M sale price is an 11.1% gain from the IPO price, but the corporate tax paid by Rally brings the net payout down to a 7.6% gain.  Then the investors will pay short-term capital gains tax on the net, which will bring their gain down to 4-6% depending on their tax rate.  They end up with a small gain, and the big winners are Ken Goldin, Rally, and Uncle Sam.

So my guess was right in the end, even though that was not the original plan of the guys running this deal.

[Aman619]

I dont think comics have a short term/long term capital gains setup.  Just a capital gain of 28%.  I searched and got this off a website:  There is short term/long term, but both are higher rates than capital gains for stocks etc:

Equities are 20% and 28% (plus the 3% surcharge from the ACA bill

Collectibles are 28% long term and taxed at regular income tax rates if less than a year.

------ but, I get your point about nearly all the profits eaten away on the Rocket Action 1.

 

Q: I have an item that is considered a collectible; will I automatically be subject to the 28% capital gains tax rate for any gain I may acquire from the sale of my collectible?

A: Not necessarily. In order for the 28% capital gains tax rate to apply, the item must be held by the taxpayer for more than a year. For example, if taxpayer bought a collectible in January 2017 and sold the same collectible in April 2017 for a profit, then the sale will not be subject to the 28% capital gains tax rate because taxpayer held the collectible for less than a year. Instead, the sale of the collectible will likely be taxed as ordinary income.

 

[Dark Knight]

Looks like it sold