Classic cars you can buy shares in... just like a stock
It’s a car collector’s dream.
A long-lost 1980 Lamborghini Countach turbo, one of only two like it that were built, found after it’s owner’s death in the storage facility he’d kept hidden in for decades.
Rare time capsule cars like it are hot commodities with skyrocketing values. This one cost around $50,000 when it was new and is worth $635,000 today. But you can own it for $127.
At least part of it.
Rally Rd. is new type of alternative investment platform that allows retail investors to buy shares in classic cars the company has identified with upside potential. It then brokers a deal, creates an LLC that purchases the car and sells between 2,000 and 5,000 in it, all regulated by the Securties and Exchange Commission.
After a 90-day lockout period, trading windows open every month or so where stakeholders can resell their shares through a marketplace housed on the Rally Rd. app. When the company gets an offer on a car, or determines the time is right to sell, it polls shareholder interest and distributes the proceeds if it closes a deal. Investors pay no trading fees, but Rally Rd. takes a commission on the original sale that’s baked into the offering price and also a 2-10 percent position in each car.
Co-Founder and CEO Chris Bruno says it is a way for retail investors to diversify their portfolios without the huge upfront costs and hassles of buying a car outright. The app currently has 75,000 users who have an average account of just $1,000 spread over several vehicles.
The current collection of about 25 cars ranges from six-figure exotics to a 1990 Ford Mustang “7-Up” edition that had an acquisition cost of $16,500, but jumped to a market cap of $20,000 at $10 per share during its first trading window.
To highlight the unique nature of the business, the company has opened a storefront below its headquarters in New York City’s SoHo neighborhood where the Lamborghini is currently on display. Window shoppers can check it out, learn more about how the platform works and even invest on site. Additional locations are planned for other cities, along with what is essentially a superstore that will house the bulk of the collection and a gathering space.
There’s also merchandise on sale that helps to both pay for the maintenance of the vehicles and drum up interest
in them. Bruno hopes to see enthusiastic investors getting involved in promoting the cars they have a stake in, which could lead to an increase in their value.
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As for when they get sold and everyone cashes out, it depends. It’s pretty clear when some cars have hit a plateau, while others, like a blue 1955 Porsche 356 Speedster are more like blue chip stocks that could continue appreciating for decades to come.
Unfortunately, all shareholders get to do is appreciate them from afar. Whether someone owns one share or 1,000, no one gets to drive them. Its asset protection for a new kind of asset.