You can buy shares in cards

General
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You can now buy shares in a BGS 9 alpha lotus, it will be interesting to see how this goes or if it’s just a scam to make money off transaction/management fees. They will obviously buy more inventory if this idea works, not just MTG, they have pokemon listed as a possibility.

That said they haven’t built their secondary marketplace for cashing out of shares, and they haven’t listed any sort of fee structure either though they do have the use of proceeds for the alpha lotus shares which state $11k expenses including an acquisition fee (https://www.sec.gov/Archives/edgar/data/1773026/000147793219003334/mythic_1a.htm).

mythicmarkets.com/marketplace

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It’s not something I’m a fan of but if it’s legit and i can get bragging rights then i may be more open to the idea.

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Nice looking site! Really like the breakdown on the Lotus page.

They also are looking for feedback. One of the choices is Pokemon (Pikachu Illustrator & Charizard).

I figured this was only a matter of time.

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mythicmarkets.com/assets/MTG-ABL90

I read through the SEC report and tried to get a snapshot.

I have no opinion and most of what is written is a quote or paraphrase from the independent auditor assessment. Pierce linked above. Also here

TL:DR . Highly speculative in nature, involve a high degree of risk with a newer company in an established market. The company will rely on the “manager” to get more Assets to be viable, the is important because the “series” isn’t its own legal entity and can be legally draw into liquidation pool in the event the company fails.

This is suitable/aimed at “qualified investors” who make minimum $100k-200 annually (including spouse income).

Sale details.

Manager purchased the Series Alpha Black Lotus for $51,000 and is selling it to the Series for $114,000

  • 11k Fees
    This is still below market value, according to the manager. Managers reference Price $166k and the difference in grades is this is a BGS 9.5.

BGS issued the following subgrades for Series Alpha Black Lotus:

· 9.5 Centering - Centering 50/50 one way, 55/45 the other.

· 9.0 Edges - Smooth edges, with a handful of specks or one minor spot.

· 8.5 Corners - Slight imperfections under intense scrutiny.

· 9.0 Surface - Original color borders and gloss.

Like-for-like Comparison.

Live Listing - looks like placeholder tbh.

Beckett 2017 articleI haven’t looked extensively at the markets because they change and alot wouldn’t be listed.

Independent Auditor assessment

Company Risk

  • Company’s ability to continue as a going concern (ability to generate future profitable operations and/or obtain the necessary financing to meet its obligations and repay its liabilities)

  • Lack of operating history (started 2018).

  • law restriction from state to state (international as well)

-Offering amount exceeds value of Underlying Asset
-Excess Operating Expenses (requires manager to acquire/source more assets for the company to be viable - economy of scale)

-Asset is liable for Company ( Liability of Investors between Series of Interests. -The Company is structured as a Delaware series limited liability company that issues different Series of Interests for each Underlying Asset. Each Series of Interests, including the Series MTG-ABL90 Interest, will merely be a separate series and not a separate legal entity)

  • Possible High insurance/storage/maintenance cost

  • Insurance may not cover all losses.

Risks to “Owners of our Interests”

  • No voting rights ( Very hard to remove manager, court proceedings and judgement/Order etc)

  • Offering price for the Interests determined before publicly allowed to trade may differ as “owners” in the future will agree to between purchasers and sellers in private transactions.

  • Funds held in escrow (can’t touch) until completion of offering.

  • Manager has no Conflict of interest policy, just a limit on amount of shares 2-10%

  • Manager has sole discretion in determining what distributions of Free Cash Flow,

  • Manager may make semi-annual distributions of Free Cash Flow (not before 2020)

  • Manager will be paid a semi-annual fee pursuant to the Series Agreement equal to 50% of any available Free Cash Flow generated by the Series for such six-month time period (the “Management Fee”).

-The Advisory Board members to make decisions in relation to the Underlying Assets that benefit the Manager rather than the Company. (Another conflict of interest)

Demographic targeted

Investor Suitability Standards – “Qualified purchasers” should consider this. ( for USA residents)

For an individual potential Investor to be an “accredited investor” for purposes of satisfying one of the tests in the “qualified purchaser” definition, the Investor must be a natural person who has:

  1. an individual net worth, or joint net worth with the person’s spouse, that exceeds $1,000,000 at the time of the purchase, excluding the value of the primary residence of such person and the mortgage on that primary residence (to the extent not underwater), but including the amount of debt that exceeds the value of that residence and including any increase in debt on that residence within the prior 60 days, other than as a result of the acquisition of that primary residence; or

  2. earned income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year.

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It’ll never fly. Not a chance.
Of course I’m the guy though who said cell phones were a fad and would never catch on;)

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I’m interested in what they pay out for collectibles. I’m going to submit one of my trophy cards just to see.

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As little as $30 per share for a total of 2000 shares for each item. That means every item is valued at least $60k

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The biggest question mark imo is liquidity. Nothing worse than being trapped in an investment with no way out.

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lol

Important note: There is currently no public trading market for our Interests, and an active market may not develop or be sustained. There is no guarantee that appropriate regulatory approval to permit such secondary trading will ever be obtained. If an active public trading market for our securities does not develop or is not sustained, it may be difficult or impossible for you to resell your shares at any price. Even if a public market does develop, the market price could decline below the amount you paid for your shares.
[/quote]

blog.mythicmarkets.com/faq

also if you want to see these guys’ test site,

www.ukarn.com/marketplace

HmHmmmHmm, who’s to say they’ve sold even a single share at all? It’d be easy to manipulate a website to say 200, 300, 500, 1000 shares have been sold when you’re under no obligation to disclose actual numbers. Would be a great way to generate FOMO.

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You’d be pretty silly to drop even a cent on this so called investment at the moment

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I still miss my Nextel push-to-talk :blush:

This is more like a souvenir sold under the guise of an investment vehicle. It could be a good option for sellers, though.

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You’re paying hefty management fees for someone else to collect.

Buy what you can and be less diversified, but do not pay someone else to collect for you. Long term, his buy prices will not be better than the market. If anything this is an outlet for his friends to liquidate their cards at top prices.

Second thought and debatable, but how does this differ from investing in a card store like Dave & Adams? The obvious answers are day-to-day operations & what is being purchased. Beyond that many aspects are similar.

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This seems like a badly-engineered attempt to capitalize on rising collectible prices. They have ONE asset valued under $200k, zero secondary market, no established fee structure, and are starting a company and selling shares already? Yeah they’ve got flashy marketing and have done the right stuff in terms of legal compliance, but to me this just reeks of jumping in the pool after half a swimming lesson.

I think the possibility of hedge funds based around collectibles is interesting, but as we discussed in the past there are currently a massive amount of hurdles to cross, most notably the overhead of whoever would be running it and the lack of total market value in collectibles as a whole. I’ll be very interested to see where this goes because this company will basically be building their own stock exchange from scratch which should be easy.

On a more personal note, I don’t see the draw in this at all besides saying you own a “share” in a rare collectible. If I’m going to put money into something intangible that I’ll never see, hold, or have any control over then I’ll play the stock market. I think once you get to the level of collectible knowledge that these people are marketing to, you can take whatever amount of money you’d be putting into this and easily make a similar (and more accessible) profit just through grading/flipping some readily available cards. And you get the fun of purchasing/receiving/grading/etc included with all that.

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Buying “shares” of collectibles / non productive assets in this manner is just nonsense IMO. The conversation has come up multiple times on this forum and seemingly had many members here giddy with excitement of potentially “owning” a “share” of a rare, out of reach card. It’s an alpha lotus today but tomorrow it may be a mantle, gretzky, charizard, illustrator, jordan, st gaudens double eagle, da vinci painting. Whatever it is I don’t care and I wouldn’t advise anyone buy a piece of anything.

But since some wanted it… well here it is folks. Here is your chance. Give this dude your $62.50 so you can tell people you “own” 1/2000th of a card that you can’t see or hold nor sell and to sell your “share” requires the building of a platform that doesn’t exist yet that likely will be fraught with hefty transaction fees if it ever materializes.

I lol’d at their “target demographic”. Net worth of $1M+ and income $200k+ then they slap a price of $62.50 per share clearly actually targeting paycheck to paycheck Timmy’s trying to live their dream.

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This same business model has popped up in the art world where you can “Own a share of a Picasso/Warhol/etc!”

It won’t work for several reasons that make the business model unsustainable and a legal nightmare.

This card won’t get funded and it will tank shortly after.

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Don’t you own crypto? How is this worse? Crypto is invisible imaginary money. At least collectibles I can tangibly determine the relative quantity, condition, ownership. Crypto is completely invisible in every aspect.

In general I couldn’t care less if this works or not, it just isn’t surprising. It makes sense if someone wants to own a share who can’t afford the whole card.

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I don’t think it’s a scam per se, but I think people investing/working on this are taking on risk that I’d say most people would not be willing to take on.

@atlas has done a great job compiling information about the company itself. I want to touch on the general idea of such an entity being able to exist.

TCG/collectibles in general are highly volatile alternative investments with little intrinsic value and a limited consumer base. The three factors aren’t conducive to public trading.

For one, they make for unethical market manipulation tactics such as coordinated buyouts that much more appealing because not only does the temporary value of the card at the very minimum go up (due to short-term supply), but the value of that stock (which will be sensitive to short-term effects) is expected to rise as well if people are unaware that market manipulation has taken place and mistakenly perceive it as increased demand. Another big concern to worry about are listings that are “won,” but not paid for. Currently, there is no way to immediately differentiate between the 2 on eBay. This can also severely impact the short-term value of a collectible, and makes it another unethical tactic that can be employed to make a short-term profit via stocks.

Collectibles also do not produce anything tangible. Their values are a byproduct of perceived rarity and desirability, but they have little intrinsic value in and of themselves. This makes them very susceptible to the changing times, and no one can really say whether or not a collectible will continue to maintain its appeal and desirability. Because of this, it’s very risky for a company that wants to stay around for as long as it can to simply focus on a collectibles market, especially if the collectible doesn’t hit the market very often/is not liquid.

It’s why you’ll never see Christy’s or Sotheby’s (or their holding companies) selling shares for art any time soon, although there is a relatively new company that is trying to do this. Again, the biggest problems going for it are illiquidity and volatility. Oh yeah, and let’s not forget about market manipulation(because if given the chance, people will do whatever the hell it takes to make money).

Bottom Line (For Me): The purpose of collecting is to own something that you desire, with the second-hand aspect of investing being a benefit that can help you to sustain your collection. MythicMarkets seems like more of a chance to capitalize on the market than anything else and does not seem like it will become a long-term venture.

It is not collecting - it is investing.
Edit: For clarification purposes, investing means purchasing for financial gain. Investing is a part of collecting, but there is a lot more to collecting.

Also, from the MythicMarkets FAQ

I’d love to know how these are sourced and determined.

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I think I’m less cynical about the concept versus a lot of other people here, but this company in particular lacks a lot of the accountability structures necessary to trust it and a lot of the low-fee posturing necessary to invest in it.

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@cman, If you think a buyout is unethically manipulating the market, you should really look at most publicly traded companies. What they do for shareholders to “show profit” makes buyouts look like child’s play. My brother works for a company that will nuke entire departments to “show profit”. People losing their jobs vs a piece of cardboard negligibly increasing in price.

Even if you want to stick to a similar theme of buyouts, look at people who leverage patents. Companies will spend millions to own a patent. Partly why Yahoo stayed relevant was their massive patent ownership. That is an entire game in itself.

Overall the idea of owning a share makes sense. The issue is execution. Overall I think people are way too cynical. The problems I hear in hobbies are adorable compared to publicly traded companies.

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Yes of course, there are a lot of accounting strategies that are used to demonstrate profitability legally/illegally (I’ll be honest in that I slept through learning these strategies in class, lol. I hated ACCT101). But do you really want to use this example? These are the very companies that string their investors alongif they never pick up the slack. Plus, if these companies get caught by 3rd party auditing companies, they are done for. This protective mechanism isn’t present for collectables. There is zero accountability, and I think we’ve all been around long enough to know that whatever can be taken advantage of, will be taken advantage of. I also don’t think we should be saying that because unethical practices exist that it’s okay for that behavior to be perpetuated and/or magnified in other contexts.

In other words, buyouts and unethical practices already exist for TCG cards. Do we really want to make it worse?

Patent ownership isn’t comparable - patents are not the end-product, rather they are used to yield tangible end-products (otherwise patents would not be bought). The “product” of card collecting is the card itself and the satisfaction/showing off that comes with it. It’s more akin to art in this sense.

Edit: I should also remind/note that market manipulation is only a part of the problem of volatility that plays into to the bigger problem of a collectibles stock exchange being able to thrive.

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