Rally allows users to buy stock in classic cars and other collectibles, making blue-chip-investment autos more accessible
Rally typically buys the best of the best, whatever the car being considered. For example, its Countach was a one-of-two-made Turbo model; its Mazda MX-5 Miata has just 492 miles (792 km) on it. That Countach went on to sell for US$1.2 million, yielding an 86% return for investors and setting a record for a mid-year Countach sale in the process.
Once a car is purchased by the app, it is legally converted into its own LLC – like a corporation – and then shares of that car, er, LLC are offered in an initial public offering (IPO) to Rally users. For example, at the time of writing this, Rally has an IPO for a 6,700-mile (10,782-km) 1996 Ferrari 355 GTB coming up. With a price of $10 per share, the market cap of this car would be US$295,000, which is very near the US$307,000 that represents the highest sale ever for this model.
After the IPO sells out, there is a 90-day holding period, during which no shares can be bought or sold. Once that period is over, shares of the car will go up or down depending on investor interest and recent sales.
To get your money out of these investments, you can sell your shares at any time, albeit not necessarily for a profit. In this sense, the shares work like a normal stock. They go up and down, and if you sell at the right time, you could make some money.
Another way to cash out is with a so-called buyout. Private buyers may approach Rally with offers to buy certain items or cars. That offer is sent down to shareholders, who will vote to sell or hold. The more shares you own, the more votes you can cast. If the sale is approved, you’ll receive the full cash value of your shares.
Rally is for a new kind of investor who invests with their head, but also their heart. Rally co-founder Rob Petrozzo says its users are driven by emotion as well as finance, and that over time they see solid returns. “They don’t love the idea of a 401k,” he says. Rally’s users skew younger, with a median age close to 30, and many are interested in NFTs and other alternative assets like sports memorabilia.
Petrozzo says many Rally users want to get involved in buying top-grade collectibles, but are “held back by a velvet rope, literally and figuratively.” By dividing these highly valuable items into shares, Rally aims to get people interested in buying into things they always wanted, at a price they can afford.
Prices range from $170 a share for part of a Lamborghini Diablo SE30 Jota; to $5.45 a share for a bit of that pristine NA-gen Miata with just 492 miles on it. If you’re reading this from Canada, and want to know when you can get started—you’re going to have to wait. Rally was initially aiming to open up to international investors in summer 2024, but it doesn’t seem like it’s got there yet. For now, the action is limited to residents and citizens of the U.S.
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