1953 Topps PSA 10 Mickey Mantle IPO on Collectible App a Game Changer
 

Earlier this week I learned of an app that can be found in the app store simply called Collectable. It offers the ability to purchase shares in sports memorabilia in small amounts and they become tradable. I didn't even give it consideration until I spoke with a client who has done this with art and these are registered with the SEC. I purchased $10,000 or 400 shares and after doing so spoke with him so I have an email into my manager to make sure I can finalize the purchase as I am a registered broker. I sure hope I can. This information is important because this is the layer of protection people need to make this work.

This is a game changer for the high end of the trading card market. You have many issues at play.

First most simply can't afford cards in the six figure plus price range. I read daily about people going to their safety deposit box periodically to visit their cards. While I like to see mine many don't see theirs very frequently so in this case it is non event. There is also the element of stocks and bonds where they are really just pieces of paper and so one can think of the card as just the same.

Next you have the impact of people buying high end items to break up in value. We have seen a huge surge in pack breaks and this is driving unopened up as smaller pieces are sold off at a premium. The same will hold true here.

The secondary market for shares will on many items see a surge in interest driving the cards value even higher than what it might trade at on its own. There are a lot of smaller investors that in mass can drive something to a premium vs. just a whale buying on their own.

Next you have the issue of simply investment. It is taboo with some but cards have performed extremely well and marquee items in particular. This is going to make investing in cards so much easier as the barriers to entry ala money to get the good stuff are lowered immensely. I see many people loving the idea of having an investment portfolio made up of top tier items and seeing if they can keep pace with other tradable assets.

The liquidity of being able to buy and sell without finding a natural buyer for the card is brilliant. No shipping. No worrying about if the buyer is legit. Will they return it etc.

I am very hopeful I can follow through with this purchase and others in the future. When I put in my order it was already 40% sold out in minutes so clearly others like this idea.

Hmmm

Interesting read. But wasn't something like this tried several years back and from what I remember - failed?

Also, what happens when the asset is determined to be "altered" and the grade invalidated. Does Collectable insure the asset and compensate investors if they failed in their due dilligence? Or do the shares of the asset simply go "boom?" And just as an fyi, besides your investment in this item, do you or any of your associates/family have an additional interest in this company?

Always better to ask questions up front.

Thanks.

They are selling $2.5 million worth of shares for the 53 Topps PSA 10.

Seems crazy to me, but I'm no investing expert.

Also not a good sign when this is what happens when I try to go to their website.
https://uploads.tapatalk-cdn.com/202...519ed760ff.jpg

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I just heard about it this week. No affiliation with anyone.

I have no comment on the part about the card being altered.

You are going to see a lot of this coming I believe.

Isn't this fractional thing already being done by multiple apps? I recall an Altered or PSA 1 T206 Wagner has already been divided. Once the IPO sells out, does this sale of a card for $2.5 Million get added to the PSA Auction Prices Realized website? It should, right?

Currently it's a Pop 2, but there are also 10 PSA 9s and 4 PSA 8.5s. If the Pop goes to 4, does it even register with the fractional owners? You guys have at it. It's not for me, but then, I've probably said that before.

Sounds similar to purchasing stocks on CashApp.
I do this time to time and have made a little change.
Little the key word.

I guess this work on a high value card, like discussed.

There may be other apps doing this. I just know this concept is going to make waves in the market.

A client first told me about this and has bought art this way and it has been extremely successful. The major difference is you can't cash out until the item sells.

The seller has to turn this card over to the holding company and it will be held just like gold is in an etf.

In terms of sale price I would think it has to recognized as the sale price.

Hard pass on all these outfits.
Yeah, always the type of thing that comes up when its impossible for stuff to lose value. Ha ha.
No thanks. I'd rather own an entire PSA 5 and be able to hold it when I want to. And sell it or not sell it. This sort of arrangement has zero appeal to me. But, as they say, to each his own.

How are the shares taxed on sale?

How is collectible/the sponsor compensated?

Having been part of a few race horse partnerships, the house always gets paid nicely. Yes, they do "all the work" but they also get most of the fun too.

It states you will get a 1099 if you make transactions and only references dividends. Not sure on taxes.

Obviously this isn't for everyone but you are going to see a lot of people get involved in this kind of situation.

Cards have proven to be an incredible alternative asset class and people want in and so this concept makes all the since in the world.

I would love to own a Jordan 10 but it would tie up too much of my liquid cash in one card and so I am someone who this is perfect for. To be able to put say 5k or 10k in one and share the upside or downside with others is tremendous.

My investments in trading cards have been the best ones I have ever made in my life on a percentage basis and I continue to believe in the market so if someone wants to put more money in and have liquidity and diversify into bigger and better cards this is a concept that allows for that and I believe will become quite popular.

Your point is well taken but it isn't a good analogy in this case. Horses need to fed and trained. A card sits in a vault.

Time will tell how this plays out but judging from the art side it has just put more fire under high quality pieces and I believe the same will happen here.

Collectable was an app that used to be used to track all of the auction house listings in one place. They were going to monetize (I think) by ad revenue and/or subscription. It was pretty awesome to use but about a year ago they stopped supporting it and i believe they sold it to the current people who are doing the fractional share as discussed.

I think the model is pretty interesting in general for cards like a Wagner, 52 Mantle, 86 Jordan Gem Mint (PSA or SGC) and cards of that class. Not sure if I'd ever invest in fractional shares of something if I knew the price was inflated to current market estimates versus what any seller of these said. In the case of the Wagner fractional share, it looked like the purchaser of the card had a 15-20% markup built into their model from their purchase price and likely got something on the back end at the terminal event (sale).

Certainly the model can work but doing a fair bit more research would be required (at least for me anyway). I'll likely stick to cards I can buy versus parts of one I wouldn't otherwise be able to buy. Still an interesting concept, though! Good luck to those who are going for it!

I’m giving it a whirl. Beautiful card and other versions of this fractional ownership stuff have done very well.

Other platforms have seen some success with low liquidity (one trading window every 3-4 months).

This will be far more successful with daily trading.

This one offers trading Monday to Friday. Awesome.

Liquidity on a secondary market. The actual card is the stock.

I saw this card in a binder and know it's origin collection which was in my backyard. Finest '53 Mantle and 100% unaltered, which is difficult to say in today's market.

Happy to own some of it.

I'm in.

easy to pass on this.

Id rather own the card or cards,imo horrible investment ,,run fast!!

Illiquid investment that kicks off no income and has very high fee’s. Sign me up now!

When I started the thread I knew the lion share of this group would poo poo it and I also thought it would be a good idea just to let people know what is about to hit the memorabilia market.

Here you have a PSA 1 Wagner that just sold for $1,146,000 through Mile High.

https://www.milehighcardco.com/1909_...-LOT72191.aspx

Wagner prior sales

Two PSA PR-FR1 Honus Wagners sold for $109,638 in 2004 and $132,000 in 2005

A PSA PR-FR 1 Honus Wagner sold for $400,000 in 2009

A PSA Poor 1 Honus Wagner sold for $402,900 in 2013

A PSA Poor 1 Wagner sold for $609,294 in 2017

A PSA Poor 1 Wagner sold for $1,169,875 in 2020


Every single one of you would have said the same thing at each of these times.

Perhaps this card doesn't turn into a home run but there will be some that will for sure. The creation of mutual funds and pushing them to the masses helped stock prices move from single digit price earnings multiples to some north of a 1000.

I am not suggesting this is as novel of a concept of Jeff Bazos coming on CNBC in 1999 and basically forecasting the future of commerce and having multitudes of people laugh at him only to go on to the be the richest person on the planet but do not full yourselves into thinking this won't have a dynamic impact on the collectables market. Many will choose to participate and many will choose not to but this is going to increase demand. It is that simple.

IMO there is a significant difference between investing in a rarity as opposed to a condition rarity. In contrast to a T206 Wagner (or unique works of art), in the case of the '53 Mantle one is investing in the perfect grade. As has been discussed ad nauseum, one person's 10 is another person's 9. On top of this one is also investing in the long-term credibility of PSA, which IMO entails its own risk. I think at $2.5M it is a very risky investment.

I'll look into it. I've invested in art through Masterworks for a couple years and the return has seemed to have been okay, but I don't really follow the art market and I mainly did it on a whim. Fee wise, investments like this are usually on the same par with Hedge Funds which are nonetheless popular.

The dollar is so inflated right now, though, I have paused investing more capital in anything except gold, silver, and bitcoin right now. I've even paused my weekly purchase of FAANG stocks which I've done for years now. I think it's the right idea at the wrong time. Smart money should be looking at undervalued plays right now and the sports card market doesn't really fit that outline. If we do, however, have a K shaped recovery which some are calling for now, top end collectibles will have more room to rocket.

Interesting how many people speak from a place of no knowledge.

No trading fees.
No cash out fees.
Daily trading market for liquidity.

Very small upfront fee only the original seller pays.

This makes sense

$617k/$1000k within 24 hours disagrees with the opinions of many cynical individuals here, although I always see some people exude negativity.

I'm in.

Per Wikipedia( I know, I know)" In 1991, Copeland sold the card to ice hockey figures Wayne Gretzky and Bruce McNall for $451,000. " Not sure what the difference is except of course more "shares" and "investors". My concern would be , who is housing and handling the card and can I trust them.

For the record, I probably wouldn't but it is tempting.

Sean, what’s the commission on the final sale?

Hmm.
 

Overall interesting concept. As others have raised - the "ipo" price is very relevant - is the 53 Mantle a 2.5M card? Not in my book. Would definitely need a high degree of transparency.

Per OP - "There is also the element of stocks and bonds where they are really just pieces of paper"

By that logic so is every business contract, mortgage, eviction notice, lease, etc. With Stocks those "pieces of paper" are shares of ownership in an ongoing underlying business. Bonds - a legal obligation of an underlying company to return the investment with interest.

Not poo pooing, just approaching realistically - it has possibilities. Not of particular interest to me, but if it were, would need to do much more due dilligence.

I inquired about submitting some of my items and they range from 5%-7% on the actual sold portion. minimum values they take are about 30k+ I'd think that owner negotiated a better rate.

It might be risky. Time will tell.

That said the perfect grade goes for huge money. A PSA 9 Gretzky OPC is say 35k. A PSA 10 is at least 700k. You and I may not agree on which we like more but the market always agrees the 10 is better.

In terms of PSA. There were people trying to short the stock at $18. Just looked at it and it closed over $46. The line is not just around the building but around the block and down the street.

Common stock is just paper. Companies create more of it each day and sell it and dilute investors at all times.

My point was it is just a line item on a statement. You can't touch it or feel it and can only see it trade on an exchange or see it in your account.

I have a huge collection so I have plenty I can touch and feel. What others are missing is cards that are being sold on EBAY right now are being shipped straight to the PWCC vault. I did one a week or so ago. Investors whether one likes it or not are coming in droves and this is just an extension of that.

I was interested until I read the legal. Sean stated he knew the provenance, which I don't doubt as he's always been a straight shooter, but there are two words in that document that raise the risk. It's a cool concept and the app is smooth to use, but I'll wait for other offerings.

"Overall interesting concept. As others have raised - the "ipo" price is very relevant - is the 53 Mantle a 2.5M card?"

Maybe? The Trout card blew my mind.

Anyone know who is behind the company and/or where they are getting their cards from? I think that info is very relevant in determining the viability of the company and the valuations of the underlying cards.

Here is my concern- I have some very expensive cards, including a t206 wagner. I could start a company and start with my wagner, selling 25000 shares at $100/share and turn my $1mm wagner into a $2.5mm card. Better yet, I could sell off only 12500 shares, keep 50%, and be totally cashed out with no risk to me. The point is, there is tremendous potential for abuse and I would be very interested to know who is behind the company, whether they own the cards they selling shares of, how they are valuing these cards, etc.

Where is the prospectus? The investor qualification materials? What exchange is trading these shares? Anything that would make this other than what appears on its face to be an illegal offering of unregistered securities?

Sure the wags has performed well. The SP 500 was under 700 bucks in 2009. Sits around 3500 today. And yes I get that is a cherry picked example but so is the Wagner.

And the problem with this scheme as an investment is you aren’t coming in at market price - there is likely a significant premium attached to the 2.5mm - and the fee’s are most likely outrageous. When the card sells, fees will again be outrageous.

So as a roll the dice, have fun, I think it’s cool. 10k is a nice vacation in Hawaii so I’m not going to knock anyone that likes to play with expendable cash.

But as a traditional investment these things are a joke for the reasons above.

I was alerted to this by Evan recently and found it to be very intriguing and said hell yeah I will buy some shares and give this a shot.


https://collectable.com/cardboard-perfection/

Here is the link to the information on the card and below is the link to the management team. It will come as no surprise the CEO is an ex hedge fund manager.

https://collectable.com/about-us/

Just like an IPO the underwriters and the seller try and come up with a price and see if there is interest. If over 62% of it is sold out in less than 12 hours there is obviously interest at the 2.5 million price tag.

There is nothing stopping you from trying the same. You just have to be willing to turn your card over and it is no longer in your possession. For many that is something they have no interest in.

That said it is a perfect scenario where you can "take profits" and still have a shot at the upside.

In this case Evan is maintaining a huge equity stake in this card. Years ago when he bought this he told me how much he had in it. It was obviously not cheap and there is some margin in the sale price for him.

Quite frankly if you put your Wagner up in one of these scenarios I would love to buy in. Find me a period of five years where that card hasn't gone up and over time it has crushed the stock market. Has the easy money been made? Sure but with the money printing that is taking place and the vast wealth disparity globally the very well off just keep getting even more well off. Obviously this is a bone of contention for many but the Wagner card doesn't care.

On a long term basis I personally see no scenario where a Wagner goes down. It is priced in dollars and so if the dollar gets weaker and inflation hits like many believe will occur it goes up. If the economy bounces back and we continue the expansion it goes up. It is a status symbol and while you and others may have purchased it for the love of collecting there are plenty of others who will buy it so they can say they have a Wagner and they think it is a good investment.

Like someone mentioned the Trout card. From $400,000 to nearly 4 million a few years later. Some college kid could have set aside 2k and turned it into a much greater sum investing in something he likes and thinks is cool. It is coming.

It is hard for me to take your post seriously when you cherry pick the March low. We don't know when that card sold during 2009 and it came back to end the year over 400 points higher.

I will cherry pick now. In 2004 the SP was was higher than where it ended in 2009. The Wagner went from $109,638 to $1,169,875.

Completely destroying the SP. Bare in mind most people with money don't have all of their money in the SP and what has driven a massive amount of the recent move is 6 stocks. Investor returns have not tracked the SP even remotely.

Would love to know if some of the folks who think this is a swell idea and just happen to have talking points, detailed statistics, and the like readily at hand are actually investors and/or funders.

Hard pass. A few early entrants will most likely make $ and those in later will be left holding worthless paper when ipo's with initial high arbitrary valuations are proven to be just that too high. Remember equity IPO prices are established by market forces, demand at various specific prices are matched to the size of the offering and a balance is eventually established just prior to the shares opening for trade. Here it seems as if an overall valuation is established then shares are sold without regard for prior demand, much different than a specialist/underwriting system we see for IPO's.

Reminds me to an extent of a few years back when Adrian Foster sold interest in his future NFL earnings. I think he monetized that at something like 23.5 million and ended up playing only a few games.

Lastly, the issuance of 1099's by an entity with little expertise/experience in the detailed record keeping necessary to produce accurate 1099's seems like a recipe for disaster.

Anyway just my opinion and good luck to those participating.

I can assure you that I don't. The idea that baseball cards are an investment for some, sounds like a good thing for the hobby to me.

I’ll be interested to see what happens. Especially if there are offerings of “junk cards.”

Yes I understand all that, even mentioned it was a cherry picked sample.

Tesla was what, 80 bucks a few years ago? 6x in 24 months what can we take from that? Outproduced almost every widely traded sports card. Trades at 1000x earnings. What does that tell us? We are in a crazy asset bubble, context is I’m down on anything that isn’t a value play. I’ll take JPM long term over a 53 Mantle or TSLA.

I’m low risk, long term, etf / bluechip / dividend investor. So I am definitely not the target market here. But I do love the hustle and as a spec play/ gambling I get the appeal.

Question for you since you are big on this as an investment. What do you have the market value of that card being today? Asking sincerely , I have no idea what that card would sell for.

Either way interesting discussion and I don’t root for these things to fail, I hope your 10k becomes 100k, this isn’t a sum zero game so ideally we are both right.

Does the website state that 62% of shares have sold?

If so, does that include the shares the cards owner is keeping?

The website is still flagged as malicious for me, so can't read the details.

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As I stated above no. I knew nothing about this until a few days ago and downloaded the app. I got an alert this morning that it went live and I logged in and did my purchase.

To answer another question below when I bought the shares it was at 41% sold out. It shows you how much is left. The 41% was of the 1 million offered.

Ah, impeccable provenance coming from a known trimmer of super high value cards...
https://www.blowoutforums.com/showth...ghlight=mathis

Wonderful. Have a good time with that.

DPek, thanks for the links. Interesting that it’s Mathis’ card and that he retains some ownership.

There is an 8-member team already assembled with some big titles and apparently successful backgrounds. That is a lot of overhead to fund from operations.

I think the idea is interesting, but it’s not for me.

I am a diversified person. I own my car, I own my condo, I have a cash account, I have my retirement accounts which are my largest asset, and I have my card collection that has rocketed to levels honestly I can't believe. In the baseball card world a guy like me is a small fish. In my genre which is primary wrestling I have the most valuable collection of anyone. There really isn't probably another space where a guy my age and with my net worth is at the top. I have had tremendous luck with cards and perhaps that will change and current values are fantasy but I am sticking with my long term vision. I own some of my old baseball cards but nothing of value and for ten years I have been beating the drum that the best cards had no where to go but up. We are now in a phase where I have never felt more strongly about that and time will tell how it plays out. For me I would love to own some cool cards from the major sports but either they are one too much capital commitment or I just have no connection to them and just would want them for investment purposes. This card is clearly one of the best baseball cards that exists. Some will say well it is only that because it is a 10. Well guess what since 1999 those same people have been saying the same thing and 31 years later the disparity just continue to get wider. That is their personal preference but the market which is a collective of all interested parties completely disagrees and they do so with their money. Buying this card at 2.5 million is not going to be a TSLA return. I am the last guy to ask about that stock because it is mind boggling to me. That said it has continued to shock long term market participants in mass but on the other side of the trade is Ron Baron who routinely comes on CNBC and says he thinks it is going to the moon. So far he has been right and most have been wrong. I have gambled away 10k before on an options trade and so there is no scenario where this goes to zero. I honestly just wanted to give it a shot and I actually think you will see a scenario where this sells out and then there won't be much turn over and the small amount of trading will push the shares to a premium. In the stock market this happens all of the time with low float stocks and with one shareholder controlling 60% of the pie and not in the float this is a likely outcome. As I stated I would love for a Jordan to come up where I could take a larger stake and perhaps a 52 Mantle and so forth. I think the fair market value for this card is debatable and I am not really in a good position to even know. I believe cards like this are like art and once they become such a coveted item they can go to levels no one can imagine. It may be a scenario like an IPO in 1999 where they sell at a huge valuation and there is little upside and so maybe this deal isn't a great one but there will be plenty more to come and I will certainly look to put a few more bucks to work. Under no circumstances do I see this as a 10X play. But I do think the goal from so many investors to find alternative assets is huge. In the example where it was 2004 to 2009, the Wagner was up from just over 100k to 400k and the market actually fell nearly 40% and simply rebounded during that timeframe. There will be rolling periods where certain assets classes outperform or underperform but monster baseball cards from what I can see have held up great and attracted great interest from wealthy people and that same holds true for high end art, comics, cars, stamps and just about anything you can think of. This is an apex item and it will always be.

They are teamed up with a broker dealer. There won't be any issue with 1099's.

This is a good thing in my view and I am still waiting to hear back from my compliance department to see if I can actually move forward. I don't believe it will be an issue but for me this should give people added comfort that they are registered with the SEC and have a broker dealer handling the trading and tax forms.

Nailed it

See you guys in about 3 months. :D

The site explicitly states over and over that no secondary market is guaranteed.


“We are hoping to provide more information on potential secondary market trading frequency in the coming months. Collectable’s vision and mission is to provide a dynamic secondary market with trading access at least five days a week; however, there is no assurance that this market will develop or, if it does, that that sufficient liquidity will establish itself or secondary market technology will allow our vision to become a reality”

Evan the guy running it is from Hilltop a hedge fund that got out of Technology and into energy in 2016.... good luck!

Impeccable at timing the top of the market!


Couldnt have made worse decisions.

Mark this as the top of the card market.

Lord knows I feel this. It was like there was a party going on and I wasn’t invited... the Russell 2000 has been lagging since 2016 and I’ve been lagging right along with it.

Maybe the legal prospectus at the bottom of the offering?

Everyone is invited. Just buy the index.

Buffet vs Hedge Fund was pretty fun to follow:

https://www.investopedia.com/article...-brka-brkb.asp

While I respect the OP as he is a financial advisor, and I think that in general, he has very sounds investment advice, I think the concept here is a bad idea for most folks. I also saw a similar article on SCD here: Link. When I first saw these articles, I was thinking this is one of the factors that is causing such a spike in the market recently for marquee cards. It's like another buyer's group out there, scooping up cards for this purpose.


The immediate red flags that I see are:

(1) 90 day lockup before you can sell your shares

(2) Owner retains 60% shares of the card

(3) Unknown liquidity of shares

(4) As far as I know, the cards are not stored by some objective 3rd party in case the cards need to be sold to pay out shareholders.

These issues will lead to potential for abuse. If the card values goes up, everyone wins. If the card value goes down, only the original owner of the card and the app will win. There are too many questions. Who's the market maker? Can your shares get diluted? Can the lockup be extended? Who sets the price of the shares? Instead of dealing with all of these complexities, just buy the entire card yourself or buy yourself a few shares of Apple stock, where the investment potential is known.


I remember a few years ago when the price of oil was sky high, and I thought that I was being a market genius by buying this ETF called USOIL, which seemingly would track oil prices that way. However, the strange thing was when oil prices went up, the ETF price barely moved. I thought I should have been making a killing, but ended up losing money instead. The excuse some something like there were a lot of complexities in the ETF like fees, the way they bought oil futures, etc that didn't translate into a 1:1 correlation of the price of oil and the ETF price. The point here is, if the investment is a black box where you have no clue the pricing structure, etc, it is best to avoid it before you lose your shirt on that investment.

You're not collecting anything. How about calling it "Ponzi investibles" instead?

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+1

Too many ways to go sideways, but I'm happy to watch some other canary fly down into the coal mine.

Hey, I sent you a private email. Maybe it didn't go through. Please remove my testimonial for your former company 5 years ago from your website for a different company I've never recommended anyone use.
Thanks!
John

There is no doubt this is a new concept and time will tell how it plays out. The client who first brought this to my a attention few years back through the art world so far has seen some solid results. What has happened there is as they create new issues it forces the the investment group to go out and find new pieces of art and thus driving up the value of the existing supply. As they can showcase that the value of the art they have already purchased has gone up it attracts new interest. I believe the same will hold true here. One of the primary reasons people want into cards so bad right now is they have done well. When guys like Justin Beiber are "flexing" their Pokemon collections on Instagram it makes others want them too. This in my view is why Gary V has had such an impact on the card market. I only keep up with a few people in the hobby and one used to post here and he has sold cards direcly to NBA players and has others contacting him on IG (Instagram) saying they want in.

I think the comparison to the USO is a poor one because it is not an apples to apples comparison. In this case one can call the Mantle 10 a commodity I suppose but there is only one other direct substitute and no futures market to artificially positively or negatively impact the market. The reason the USO did so poorly is two fold. One as they take in assets they must buy more futures contracts and can have a significant impact on the market as they put those funds to work essentially becoming the market and two those ETF structures have to buy front month oil futures contracts where there is generally a time value premium embedded. The oil futures market is generally in contango which is what destroys an ETF like this ones performance. The only time you have a positive role is when it is in backwardation meaning the current oil spot price is higher than the futures market. For example if oil is currently at $40 and the following month futures contact is $38 you experience no negative role and so the underlying value of the ETF structure doesn't deteriorate. Most of the time the market is in contango where you have an upward sloping futures curve and so as time goes by the premium gets drained out of the front month contract as it comes closer to the spot price and the ETF will lose value and then must start the process all over again. This is why if you look at the VXX a popular trading vehicle to attempt to trade the VIX you will be losing money every month if the VIX stays flat. The front month futures contract has at least a 7% premium so over the course of 12 months it will naturally shed at least 84% of its value unless the VIX rises. Hence why it has had numerous reverse splits. These are very complex vehicles and most when purchasing them don't realize what they are up against.

After seeing that only 40% of the card is being sold, I disagree that the sale price should be recorded as $2.5 million. Had 100% of shares been sold, I would have thought it would count as a sale.

I love this concept. There are quite a few cards that have increased in value so exponentially that most collectors will never have the opportunity to own. This gives them the ability to participate as investors in those cards. Yes others have said you're not really an "owner" not having the card in your possession, but how many of us have the ability to own outright a Ruth RC, T206 Wagner or a PSA 10 Mantle? The real value though will happen if this takes off and you can easily buy/sell gaining liquidity on your investments.

Is there any way I can short this card (at this particular price) and company for that matter? Folks need to remember 1929 and 2007. 1929 stock investors didn’t think the market could go anywhere but up. Housing and real estate investors thought the same thing almost 80 years later.

This card market is overheated. As soon as the stock market corrects, the rest will soon follow. If this is a game changer then I’m glad I’m not in the game.

Thanks for the input, David. You definitely know ETFs much more than I do. How about the other red flags I brought up? You really don’t see significant risk there even in a down market?

Frankly, I think cards still have more room to run because I think it will eventually replace coin collecting as the top hobby with all of the news happening on ESPN and so forth. However, the greed that led to the 80s/90s bust can always repeat itself so folks should be wary.

I don’t collect cards purely for investment. It’s a hobby that’s fun and not one that I’m trying to beat the stock market on returns. However, I prefer that after I sell my cards, I can at least break even especially after the 15-25% in seller fees on eBay or at an auction house. And if I come away with more money to buy more cards, all the better. However, I really like having the card in hand. If it can’t hold the card anymore, it’s not a hobby anymore. It’s pure investment. So something like this needs to be looked at in purely those terms.

Your bullet points are all reasonable concerns. I think the 90 day lock up period is actually a good thing. One of the problems in the stock market when an IPO or a secondary offering is announced is you get a lot of hot money that wants to get in for a minute and out with some cash. It makes a stable secondary market much more difficult when the buyers are not natural buyers who plan to invest and instead are just flippers. I also think it will give some time for the dust to settle and see what other offerings they bring out and how much demand there are for those. Let me be clear I have no information about the doings of this company. My belief is purely market based and I see this morphing into a concept and if I had to guess they started with a big one like this to try and get this thing really moving. I would assume after looking at their website and the talent pool they have working for them that there will be a media blitz and attempts to go on television and push this idea.

The fact that the owner retains 60% ownership means he still has a lot of skin in the game. It also means the available supply of seats at the table are smaller and so in theory could drive the price up more easily with less demand to get in after the 90 day lock up period. One person raised a good point earlier about the expected bid ask spread. In the stock market a very liquid stock might trade a penny apart and if you use a Fidelity or a broker dealer like that you can actually get executed generally speaking at the mid point so half a penny. We are not talking about a listed stock here so there has to be some expectation of a wider spread. In the stock market you also have market markers working for themselves who carry inventory and so they are buying when others aren't with the intent to provide liquidity and to scalp money from small price changes. I am not sure if the broker dealer that is providing liquidity with this on behalf of the investment firm will attempt to do this. Sometimes there is what is known as a supporting bid where they try and keep the price from falling and I suppose it is possible here. The trading aspect of this is definitely something new and I think it will work itself out over time. If people buying in are using funds they need back in a 90 day window they really shouldn't be placing funds in a deal like this.

The primary issue in my view that matters is what happens to card prices of this magnitude. I keep hearing this is the top of the market and maybe for the time being it is. I think those are bold claims. Asset price predictions can be very humbling. Card prices I would argue are even harder to predict than stock prices because there are no real metrics to go on. When Apple hit $138 it had a trailing PE of 41 times earnings. A valuation level I never dreamed possible for the company. There was no shortage of analysts on TV raising price targets and these are well trained finance professionals trying to rationalize the move and suggest further gains ahead. With cards you can't really say well this is overvalued because of real metrics. It is guess work. In March when the market was falling there was more doom and gloom on this board than any I participate on. Some very ominous predictions. I just sold a card Friday night that has gone up over 1600% since then. They felt their predictions were based on logic. I at the time was one of the loan bulls but I can't say in any capacity I thought this card would rise to this degree. You can be right about the trend and wrong about the price.

In the case of the 1953 Mantle this is clearly one of the best looking baseball cards ever made. It is a true work of art. What is that worth? I don't know. The card in any condition has always been highly sought after and the set itself has a very low number that have graded a PSA 10. You have a combination of factors at play. Star power, attractive card, scarcity of condition, and a very popular set and so the recipe for long term demand is undeniable. The only real question is what should that be worth. If it is the top of the market how far down does it go? I would imagine in the example I gave above in 2009 when a Honus Wagner sold for over 400k there were hobby participants like those who visit this board that would have said that is insane. Unreal. I can't believe someone would pay that for a PSA 1. That has no where to go but down. Maybe the card consolidated for a few years and didn't really move much and then it started to climb again. I think a more realistic scenario is perhaps this is fully valued at the moment but under no circumstances do I see a major correction in top level cards. I for years have used the example of the 1952 Topps Mantle PSA 10. There are obviously only three. You can have all the money in the world and still can't get one. Imagine being a hedge fund manager and in your 63rd floor apartment in New York City and having a party with this prized card in a glass case and everyone at your party sees this baseball card and says OMG tell me about this. This is one of only three of the finest known examples of the most popular baseball card. What is it worth? At 2 million it is cool. At 10 ten million it is awesome. And so on. The higher the price the more interest there is. This is how things work. The insatiable appetite to have what others can't is not going away and so while low dollar cards where supply is plentiful may decline the wealth class will still be interested in a card like this and I believe even more so in the future.

The company is teaming up with a broker dealer and so for them to make a market in the card it has to be held as collateral. I have had limited text contact with Evan and the first question I asked him was do you have to turn the card over. He said yes. If anyone should be concerned about its where abouts its him with 60% ownership. This issue is the least of my concern.

Investment?
 

Nothing wrong with fractional ownership if the valuation is fair. Owning a fractional share of an overvalued company(card) is not a good idea. If the Mantle 10 is worth 2.5 mil at auction then a fractional share is a fair investment. If the value is $1.25 million at auction then you are paying double the current value to own a fraction. As a minority owner you will have no say in how or when the card is sold. Not sure what liquidity you have if you want to resell the share.

How did they get all their contact Info? I never signed up to my knowledge

I agree with you when it comes to static assets, but if you look at the past decade “overvalued” companies are pretty much what have paid the bills. The majority of the leading gainers have been riding PE’s of anywhere from 15-1 to 40-1. Investing in something “overvalued” isn’t necessarily a losing proposition.

What's the best way
 

What's the most lucrative way to cash out of my ETopps portfolio to diversify into this exciting, new brand of card-based profiteering?

Hmm now they have an article by that hack Siedman?

How did they get their contact list again?

Let me get this right-the owner of the card is an owner of the fund. Is that correct? So he makes money on the listed valuation for the card (I believe i heard that it originally sold for $1 million) and the fees the fund charges? Is that correct? Who determines when the card will be sold? How are positions marked to market if trades do not take place? What oversight body is regulating these transactions? If there are gains for investors are these collectible gains or ordinary capital gains? Are there truly independent board members? Thanks for any answers.

Yeah what could possibly go wrong there, oldjudge?

I am perplexed how an outsider of this newly formed company with knowledge of the ins and outs of investing on Wall St would support such a venture but ok. Maybe I am missing something. I would love to hear answers to your questions.

For me, the downside risks and unknown outweigh the potential upside. My first concern is the offering price. $2.5M? I wonder how the company determined this is the card’s current value? I suspect this is a nice premium. If so, investors are already starting off underwater from true market value.

Next, who determines the card’s value when the lockout period expires and going forward? How often is it reassessed? How is it determined? How is it communicated? Without this information, I don’t understand how any liquidity occurs.

Finally, who determines when it’s time to actually auction the card? What factors and objective criteria does the company use? What if during a market down period, the company’s owner needs to raise cash to cover other investments, pay down debt, wants to invest funds in a higher returning venture, needs to pay alimony in a divorce, etc. If he wants to sell, due to his personal needs, and the market is down, everyone is automatically going to take a bath.

However, I suspect the company is playing with house money. It is retaining 60% ownership. I bet the 40% covers the card’s purchase and the administration fees, giving the house a free roll.

Like Buffet says, never invest in something you do not understand and know all the details. I’ll risk my hard-earned money in the stock market, not wildcatting.

Hmm isn't it surprising that 40pct of 2.5 million is 1 million. What a coincidence.

Im sure some people will be into this, but not for me. First and foremost, Im a collector, not an investor, but one of the aspects I like about sports cards, comics, gold/silver etc is I like that its a tangible asset...I dont buy gold/silver shares from Rosiland Capital, and owning shares of a card, any card, has zero appeal to me...but to each their own.

+1
I don't share my food (will always buy what my SO or other wants) and I don't share my sportscards.
And a card because threads need cards.

This hobby is about STUFF and I can't imagine being active in the hobby and not having STUFF. You'll never touch something you own the corner of and you won't really have a collection at all.

Thanks, appreciate your thoughtful response.

Here is an interesting article I just read. Apparently they already have 30 million of collectables under management.


https://www.insidehook.com/article/s...-mickey-mantle