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Alan Goldsher is Collectable’s Head of Content.
Visit him at http://www.AlanGoldsher.com or on Twitter @alangoldsher.

What the Eff is Fractionalization?

We know the sports memorabilia world can sometimes be difficult to navigate, so every so often, Collectable CEO Ezra Levine will drop some knowledge. If you have something you’d like to ask Ezra, you can write him at [email protected]

Hi, Ezra-

My husband and I have been collecting for 5 years and mostly purchase memorabilia through eBay. We keep our memorabilia in the house and like to show it off to our friends when they come over on Sundays for Bengals (or Reds!) games. I don’t really understand the concept of fractionalized ownership. Can you explain it to me?

Sara B., Cincy, Ohio

Hey, Sara

Thanks for the question, and congrats on Joe Burrow! Look forward to seeing him in Bengals orange and black.

Fractionalization is one of the most important and exciting features Collectable is bringing to the sports memorabilia industry, but it requires a bit of explaining.

In its simplest form, fractionalized ownership allows for multiple people to own the same item. 

Think of owning shares in Apple stock: There’s only one company, but many investors can own shares in their brokerage accounts and hopefully make money over time. That’s the same concept we’re using with fractional ownership of sports memorabilia. One item, but many shareholders who can own shares in it. 

Collectable will be sourcing valuable, rare, and iconic sports memorabilia and sports cards, and offering the opportunity to own shares in these items to sports fans all across the country and of all income levels. 

So why is fractional ownership so important and revolutionary to the sports memorabilia and cards industry? Simply put, it democratizes an industry that, at the top end, has only been available to wealthy collectors who could afford to purchase these items. Now, all sports fans can own the best of the best for as little as $20.

Here are some key stats and points that led us to launch Collectable:

  • Prices have risen – just take a look at the Mike Trout card that sold for close to $4 million dollars recently. That’s great for the “sports collectibles as an investment” narrative, but most sports fans couldn’t afford to spend anywhere close to that amount of money!
  • The most rare, valuable, and culturally significant sports collectibles tend to perform well financially. 
    • For instance, the PWCC Top 100 Index is up 264% over the last 12 years. By comparison, the PWCC Top 500 Index is up 171% over the same period. (Source: PWCC)
  • 92% of the United States is “unaccredited”, meaning they would not be able to afford the items on our platform without fractional ownership. (Source: Dealmaker)
  • 60% of the United States population identifies as a sports fan. (Source: Gallup)
  • 67 million people in the United States currently own or have owned at least one sports collectible item (Source: Forbes)

Because each item will have many owners, we need to ensure the items are kept safe and secure.

That unfortunately means you won’t be able to show your Collectable items to your friends, physically, on Sundays. You will be able to show the items off on our app and through your digital stock certificate, though. 

Hopefully that’s a small “price” to pay!

My best,

Ezra

 

Disclaimer: All information provided herein is for informational purposes only and should not be relied upon to make an investment decision and does not intend to make an offer or solicitation for the sale or purchase of any specific securities. Prospective investors should note the speculative nature of investments in sports memorabilia. These assets are illiquid, and loss of complete value is possible.