Last summer, however, a new equity-trading platform, Rally Rd., made a 1952 Topps Mantle card available for investment. On the 1-to-10 industry grading scale, its card rated a 7, or near-mint, just one notch below the card that sold for 408 grand and two notches below the $2.88 million card. Rally made an initial public offering of its Mantle card for $132,000 last Oct. 18, as investors purchased 1,000 shares of the card for $132 each. Those shares sold out in 10 minutes and, nine months later, the card is now worth $162,000—a $30 gain per share for a yield of 23%.
Rally Rd. first started doing business in the classic car market but has expanded to all collectibles, including sports cards, memorabilia, Hermès Birkin handbags, Rolex watches and much more. Riding the wave of attention surrounding the Michael Jordan series, “The Last Dance,” Rally debuted a 1986 Fleer Jordan rookie card for a $40,000 IPO, which sold out in 30 seconds and was ultimately acquired in full by an investor for $72,000.
“Our main goal was always to give access to everyone in this new world of passion-led investing,” says Rob Petrozzo, Rally co-founder and chief product officer. “It’s just a really aspirational asset class. And it’s had huge returns—but for a small group who’s lucky enough to have access. But, meanwhile, [there are] the auctions and the reality shows and everything. It’s this massive industry that everybody follows. And they see the headlines but can’t really put their money where their mouth is.”
The idea for Rally Rd. began in 2015 with three friends: Petrozzo; his high school friend Christopher Bruno; and Bruno’s Williams College roommate, Max Niederste-Ostholt. Petrozzo’s background was in design, so he developed the product. Bruno is a serial entrepreneur who took the reins as Rally’s CEO. Niederste-Ostholt had been an executive at Barclays Investment Bank and came on board as CFO. They wanted to lessen the barrier to entry for these markets, which historically have had the feel of being “very much closed door and velvet rope,” Petrozzo says.
The premise of Rally Rd. is to turn collectibles into companies with SEC approval, complete with cap tables, investors, and marketing. The objects remain in Rally’s care, either at their SoHo showroom in New York City or in one of two secure storage facilities in Delaware and Pennsylvania. (Investors typically receive special visiting privileges.) After the IPO, the shares are locked for 90 days. When that ends, Rally opens a trading window every 30 to 60 days for shares to be bought and sold.
Rally limits individuals to 10% ownership during the IPO, but someone can choose to purchase the item in full later on. Muhammad Ali’s contract for the 1971 Ali-Frazier “Fight of the Century,” for instance, debuted with a $30,000 IPO but was sold for $39,000 a few months later, a bid that received 93% approval of the shareholders, Petrozzo says.
A sense of nostalgia seems to be welling during the pandemic. Petrozzo adds, “From an investment standpoint, it holds up against the S&P and against the NASDAQ. When you look at those long-term returns, it’s just been coiled up for so long that now in this moment, with everybody kind of reconnecting with their childhood, you’re seeing a lot more a lot more activity inside those individual spaces.”
Petrozzo says that these truly unique “one of one” collectibles have shown the greatest interest. Rally also has a T206 Honus Wagner card—the most famous and expensive one on the market—but there are 57 known examples of it. Jordan’s autographed game-worn sneakers from 1988 that were previously owned by NFL Hall of Famer Jack Ham, however, is one of a kind. It debuted for an IPO of $22,000 at $11 per share but most recently traded at $37 per share for a total value of $74,000, a 236% increase.
Rally tries to present each item not only with comparable price points but with a story to contextualize its significance. The very first IPO was a 1977 Lotus Esprit S1, which debuted at $77,700 and is now worth $118,200 on the platform. A 1976 model of the car was used by Roger Moore as James Bond in The Spy Who Loved Me, and its entry on the app includes a quote from Tesla founder Elon Musk discussing his inspiration, saying, “It was amazing as a little kid in South Africa to watch James Bond drive his Lotus Esprit off a pier, press a button and have it transform. I always wanted it.”
The company, which has raised a $3 million seed round led by Columbus Nova and then a $7 million Series A round in Sept. 2018 led by Upfront Ventures, has attracted a wide range of individual investors. There are financial professionals, such as Acorns co-founder Jeff Cruttenden and Betterment co-founder Eli Broverman, as well as megastar rapper Nas.
“We were trying to [build] something that acts like a finance app, but it looks and feels like the app that you use most,” Petrozzo says. “We didn’t want it to be sort of that staunchy, very much like a white label version of a stock market. We want it to feel like what it actually is, which is this community and educational portal, where there’s the option to invest and spend some money, but really, we want to sort of bring the assets’ stories to life first.”