Analysis of PWCC Vintage Auction 10/13/19

[Dpeck100]

Originally Posted by frankbmd

If you were a company going public in need of $50,000,000, would you sell

A) 10,000,000 shares of stock for $5 a share in an IPO or

B) would you short print 25 pristine stock certificates in plastic cases impregnated with Joe Orlando’s saliva and verified by Spence and sell them for $2,000,000 each?

The players (in the market and in the Vault) may be the same, but how a short-printed modern, shiny piece of in cardboard is analogous to equity in a potentially very profitable start-up or in a Fortune 500 company for that matter eludes me,

but then again I will never be vault-worthy and my lack of understanding doesn’t bother me one iota.

The shareholder base of an IPO is not a good comparison here but I will try and answer your question. On one hand it is nice to have a smaller number of shareholders to answer to with more skin in the game. It also will impact how shares are traded in the secondary market and make it harder to gain access so in theory this will make it easier for the share price to rise with such a limited supply of shares. It also though makes you more susceptible to price decline due to the limited liquidity and will also expose you to the issue of some shareholders not being interested because they can't come up with the amount to get in or can't buy enough in the secondary market once launched. The larger offering gives more people a chance to get in but will create much greater liquidity in the secondary market and you may end up with some very significant shareholders controlling more of the voting rights than perhaps you want and making it harder to manage the business. There is no right or wrong answer here.

Short print cards are about bragging rights. That is why they were printed this way. The goal was to create artificial scarcity and the ability for only a very few to say they own one. I certainly have 200k but I am not in a position to drop 200k on a single card as it would be too risky of a move but for someone with a massive net worth this might be the equivalent to a 2k card to them. Once a card becomes a must own the price goes up and where this goes from here is anyone's guess. For the nearly ten years I have been participating in online forums there has always been a chorus of people blasting the buyers of these cards and yet they only seem to go up. 15k was too much for a Jeter 1993 SP. 25k was unthinkable. You get the point.

I don't try and put myself in someone else's shoes when it comes to what they buy because everyone's circumstances are different. Do I think putting 200k into some of the more marquee vintage cards is smarter? Perhaps but perhaps not.

At the end of the day this modern frenzy is alive and well and while the risk profile of the purchases appears quite high so have been the rewards and this is going to keep it going.