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Fractional Investing Apps Make High-End Collectibles Affordable for Everyone

Innovative Apps Are Becoming a Driving Force in the Legitimization of Cards and Collectibles As Tangible Assets

A quick note relevant to this article and The Hobby as a whole — the word “collectable” describes something that can be collected (like a payment), whereas the word “collectible” describes something worthy of collecting (like sports cards). Grammar nerds can learn more here.

In Spring 2015, Millennial-focused stock trading app Robinhood launched for public release and changed the paradigm of the long-established trading industry by offering fee-free trades for all users. With it’s slick, minimal user interface and compelling referral program (give a free stock when you refer somebody, get a free stock when they sign up), the app has since grown to a valuation north of $10B and caused the rest of the major players in the industry to move to a fee-free trading model driven by mobile apps.

At the beginning of 2020, Robinhood announced that it would be begin offering the option to purchase fractional shares of publicly traded companies, making it possible for somebody to invest in, say, 1/10th of a share of Amazon stock for $300 dollars, rather than purchase a full share for $3,000. Naturally, this functionality massively expands the number of investment opportunities for people who do not have $3,000 to invest, or who want to diversify their investments at a smaller investment level.

While not solely responsible, Robinhood’s introduction of fractional shares has been a huge driving force in causing the concept to explode into mainstream thinking. The concept of fractional ownership is quickly being accepted by investors of all kinds, and in the past year or two, the concept has taken root within the sports card and memorabilia industry.

In early 2018, Rally Rd. launched their mobile app, allowing users to invest in real equity stakes of classic automobiles for as little as $50. The company drew positive attention for their business model––purchase a rare tangible assets, break it into smaller shares, and sell those shares to thousands of investors. For example, Rally purchased a 1955 Porsche 356 Speedster (kept in a temperature controlled garage), then made 2,000 shares available for $212.50 each during an initial public offering (IPO). As of October 2020, 83 shares have been sold during trading windows and the share price has increased to $250.00 (a 17.6% increase).

After proving success with the model in the classic car category, Rally Rd. has since expanded its offerings to include sports card, super high-end fashion items, vintage computers, signed first editions of classic written works, and even cases of ultra-fine wine. During each IPO period, users gobble up the available shares and then wait for a trading window to open in the future where they can choose to buy or sell shares depending on the changes in the market value of the item. They’ve even collaborated with Topps to release an ultra exclusive 2020 Topps 1st Edition Complete Set.

Collectable, the newest entrant to the fractional investing fiesta, launched in September 2020 and focuses exclusively on sports memorabilia and cards. If not signed up already, you can use this referral link to get a free share of a card. They made a splash at launch by offering 40,000 fractional shares of a PSA 10 graded copy of a 1953 Topps Mickey Mantle card at $25 each. There are only two such cards in existence and it is currently estimated to have a market value of more than $10M, so if you do the quick math, you’ll notice that Collectable investors own about 25% of the card, while Collectable itself owns the remainder at this time.

In addition to the Mantle, Collectable has conducted IPO’s for several other iconic cards. If you’re not too familiar with sports cards or their market value, the app provides easy to understand summaries of what makes the cards so unique and desirable, emphasizing key components like rarity (scarcity), difficulty of grade, and overall “iconicness” of the player(s) featured. You can see a few examples below of items that have recently closed their IPO and will likely be available for trading again at some point in the coming weeks.

Have you started getting into fractional investing? Have you tried using Rally Rd. or Collectable? If you have, or if you have questions and want to know more, leave a comment below. We believe fractional investing in sports cards is not only here to stay, but likely to be one of the most important factors helping sports cards be viewed as serious (let alone, potentially lucrative) investments, especially outside of the card collecting audience as it exists today.

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