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When shares of a stock become high, many investors consider buying fractional shares so that they can invest without having to allocate large amounts of capital.
Now, thanks to the rise of sports card investing, the same logic is being applied to cardboard and foil.
Yep, you can now buy a 0.6% stake in a baseball card. But how do you buy such a small percentage of a card? As you may have guessed from the name of the review, one way is by using Collectable’s platform.
So what is Collectable? How does it work? And how does it stack up to the other players in the fractional ownership game? Let’s investigate.
What Is Collectable For?
Launched in September 2020, Collectable is a platform that lets you buy, sell, and trade fractional ownership shares of baseball cards and other valuable sports memorabilia.
If you’re new to fractional share trading, the core idea is this:
Maybe you think the value of a Floyd Mayweather rookie card is going to skyrocket. You’d love to buy it so you can flip it later – but it’s $20,000.
Even if you can afford the whole card, you still have to store it, preserve it, and pay the PSA $1,000 to re-certify its condition before selling it again. That’s a lot of cash — and exposure — for such a speculative investment.
Hence why fractional ownership is popular, instead of $20k for the whole card, you can just pay $200 for a 1% ownership stake, let someone else handle storage and recertification, and still profit from a flip.
Now, Collectable isn’t the only player on the market offering fractional ownership. How does it work, and what makes the platform stand out (for better or worse)?
Read more >>> What Is Fractional Share Investing?
What Does Collectable Offer?
Collectable divides its investable offerings into seven categories, which operate a bit more like filters since there’s so much crossover between them:
- Collectable 25 – The 25 most valuable assets on Collectable, rebalanced quarterly
- Under Comps — Assets that are trading cheaper than comparable assets in terms of properties, characteristics, assets, and grades
- Memorabilia – Jerseys, photos, sneakers, and more
Oh, and for the curious, the most valuable asset on Collectable at the time of writing was a Babe Ruth 1914 Baltimore News card, with a market cap of $12 million.
How Does Collectable Work?
Here’s how Collectable works in a nutshell:
Collectable’s team of experts and analysts purchase valuable sports cards and memorabilia that they expect to rise in value.
The items are converted into SEC-approved Regulatory A+ offerings — essentially corporate entities — so that the equity can be split into fractional shares.
The collectable launches an IPO. Once the IPO is fully funded, shares are locked up for 90 days.
After 90 days, the secondary market opens for trading every weekday, 3:00-4:00 pm. Such a narrow window of time can help concentrate and encourage trading activity.
Finally, if someone offers to buy out the asset, trading immediately halts, and Collectable gives shareholders 48 hours to vote on whether or not to accept the offer. Upon a sale, the cash is distributed among shareholders based on their equity stake.
Read more >>> How to Determine Your Risk Tolerance
How Does Collectable Make Money?
Collectable makes money in two ways:
- By including a 1% to 10% “sourcing fee” with each IPO
- By keeping equity in certain assets and profiting from a sale
It’s worth mentioning that Collectable is not a broker. Instead, it outsources trade processing to FINRA- and SIPC-registered broker-dealer Templum Markets LLC.
Main Features of Collectable
You can use Collectable via a mobile app or the web version.
The Collectable Mobile App
Collectable initially launched as a mobile-only experience and only recently began building out a web-based application (which I’ll discuss below).
But for now, the greater focus on the mobile experience clearly shows.
Collectable maintains a respectable 4.0 stars on the Play Store and 4.7 stars on the App Store. Granted, most of those are anonymous ratings – not reviews — so their authenticity can’t be verified. But I’m willing to give Collectable the benefit of the doubt because their app is pretty slick.
The app is divided into five pretty self-explanatory tabs:
You can easily place a BUY/SELL order from the main trading window, learn more about the asset and the athlete, see how comparable assets have sold, and more — all through a clean, intuitive interface that never overwhelms you.
I especially like how the Insights tab features relevant stories and podcasts and shows you which assets are discussed. All other investing platforms, regardless of asset class, should take note.
Overall, the mobile experience on both platforms shines for being stable, innovative, and data-rich.
The Web App
Collectable initially launched as a mobile-only experience and is just now building out its web app.
Better late than never. Because as slick as their mobile app is, I think adding the option to view charts, photos, and historical data on a much larger screen is the right move – especially when you consider that a small but wealthy percentage of Collectable’s users will be older than 65.
The web app looks like it will be excellent when it’s fully built out, but at present, the Insights, Portfolio, and Account tabs say “coming soon.” Something to consider if you value an out-the-box desktop experience:
Comprehensive Analytics and Data
Finally, it’s worth it to shine a light on the impressive amount of data Collectable provides with each asset. Inside each trading window, you’ll get:
- Historical price data, with a Share/Mcap toggle
- The orderbook
- An “In Brief” summary
- An athlete summary
- A bulleted breakdown of the asset and why it’s so valuable
- Comparables, i.e., how similar assets are selling across other platforms (eBay, Goldin, etc.)
- Insights, i.e., where this asset has appeared in the news
Collectable seems commendably aware that speculative investing requires a tremendous amount of research to do with an even vague degree of accuracy and success.
Without naming names, I’ve seen platforms provide way less data as if to say, “We’ve already pre-vetted this; it’s a winner.”
So Collectable deserves major kudos for pre-vetting assets and sharing their homework.
Fees and Limits
Since Collectable makes money through IPO sourcing fees and their equity investments, the platform only ever imposes two fees on regular users:
- 1% trade fee, charged by the broker-dealer to both buyer and seller
- 3.15% + $0.70 fee for funding your account with a credit card
So if you fund your trades with a bank account (safely connected via Plaid), all you really have to worry about is that 1% trade fee.
This is higher than what you’d pay to buy shares of an ETF but lower than most crypto platforms.
Who Is Collectable For?
Collectable might be a good fit for you if you were already considering investing in rare sports cards or memorabilia but hadn’t yet found a practical or cost-effective way of doing it.
That may sound like a pretty narrow population of investors. But that’s precisely who Collectable is looking to attract. It’s catering to a niche within a niche: risk-tolerant investors who also love sports.
Collectable isn’t trying to become the Coinbase of fractional ownership with simple charts and beginner tutorials.
Quite the opposite; its deep well of analytics and distinct lack of onboarding materials speak to its goal of letting a small group of experienced investor/sports fans hit the ground running.
How Do I Open a Collectable Account?
Despite its unconventional assets, opening a Collectable account follows virtually the same process as opening any other form of brokerage account.
You’ll jump through the standard hoops to prove who you are, check the “I have read and agreed to” boxes, and link bank accounts.
Collectable did throw me for a loop when they asked me to verify the name of a street near an address where I lived ten years ago. I had to whip out Google Maps for that one.
Anyways, once your ID and funding source is verified, it’s happy trading.
How’s the Customer Service?
Collectable has a support email ([email protected]) and a phone line you can text (833-995-2178).
Thankfully, Team Collectable responds to inquiries within 24 hours, and in my experience, it was less than 45 minutes. Plus, their response was both friendly and thorough.
In short, getting help shouldn’t be an issue if you choose to invest with Collectable.
Is Collectable Safe?
An equity share of a $12 million baseball card you can’t see may seem fishy to some, but don’t worry; all of Collectable’s assets are SEC-registered, and their trading activity is safely routed through a FINRA- and SIPC-registered broker-dealer.
In a word: Yes, Collectable the platform is safe. But is investing in sports memorabilia safe? In other words, do the potential benefits outweigh the risks?
For the average investor, probably not. Many experts describe investing in speculative assets — whether crypto or an equity share in a Tom Brady jersey — as a form of gambling.
After all, even with a team of experts and predictive models at your disposal, you won’t always pick winners. Case in point, out of 154 assets currently trading on Collectable, 120 have lost value since their IPO, and 39 of them have lost more than 30% of their value.
In short, Collectable is a safe place to make risky investments in an emerging, speculative asset class.
Best Alternatives To Collectable
Rally lets you buy and sell fractional ownership shares in a wider variety of unique and valuable assets. Its impressive collection contains sports cards and memorabilia, classic Ferraris, vintage whisky, and even first edition copies of classic American literature.
Needless to say, Rally stands out for sheer variety and also for having 0% trade fees. However, you’ll find much higher trading activity for specific sports-related stuff on a niche platform like Collectable.
Dibbs works by converting rare trading cards and collectables into NFTs, not corporate entities. This enables them to split up shares — and facilitate trades — 24/7 using blockchain tech—no need for intermediaries.
Despite a lean-sounding operation, Dibbs has some hurdles to overcome. A 2.9% trade fee is unacceptable when competitors are charging between 0% and 1%, and using blockchain tech to circumvent securities law is precisely what landed BlockFi a $100 million fine.
But I listed Dibbs here because they’re unquestionably an interesting one to watch.
The Bottom Line
Collectable is a well-crafted platform that caters to investors who love sports and are looking to add some sports memorabilia to their portfolio.
If you fit within that niche, Collectable has a lot to offer: ample inventory, detailed analytics, and a slick, intuitive UI on both mobile and desktop.
But if sports and high-risk, speculative investing don’t appeal to you, it’s an easy pass.