Collectibles are ‘largely immutable’ in ways companies aren’t: Rally CEO

George Leimer, Rally CEO, joins Yahoo Finance’s Alexis Christoforous and Kristin Myers to discuss democratizing access to blue-chip collectibles and NFT trends.

Video Transcript

KRISTIN MYERS: The sale of collectibles is on the rise as the price of items from cars to alcohol are soaring. But our next guest is hoping to democratize that process. We're joined now by George Leimer, CEO of the application, Rally. So, George, how does Rally really work?

I think a lot of folks really understand you purchasing a car or a rare vintage of wine. But how does it work to get involved in being a part owner of a painting, for example?

GEORGE LEIMER: Sure, thanks. Thanks for having me, by the way. Rally, what we do is we take rare collectible assets and we turn them into tradable securities. They're SEC-regulated, tradable securities, and then we offer those securities to investors. And investors invest in those securities just as they make any other investment. And so the process is really simple for the investors, and that's how it works.

ALEXIS CHRISTOFOROUS: I know you've had a number of different items IPO on the platform. I actually had covered Rally when it first came on the scene back in 2017. I spoke to your founder, Chris Bruno, who I know has stepped down as CEO and is now president of the company. And at the time, the company was just dealing with vintage cars.

I got to sit in one of them. It was super cool. You've now expanded to a whole bunch of different things. And I just want to tick through some of these items that you've recently IPO'd and walk us through this. This one caught my eye-- a piece of the Staples Center court from Kobe Bryant that was actually signed. Tell us how much that's going for.

GEORGE LEIMER: Right. Well, we offered that for $800,000. You know, that piece really is the greatest example of what Rally's all about, right-- so an item that people are passionate about, a person that people were passionate about, and then, of course, an artifact from a very historic night, right-- not only was it Kobe's last game, not only did he sign the floor, but, you know, he scored 61 points that night.

I think the story goes that Shaq bet him that he couldn't score 50 in his last game, and of course, he went out and put up 61. And so really, that item is really sort of the best example of what Rally's all about, because we're bringing together things that people are passionate about, and also things that are rare and, quite frankly, they otherwise would just never be able to participate in.

KRISTIN MYERS: George, you know, when a person decides to invest in a company, they can look at the company's balance sheet. You know, they can look at their quarterly earnings and they can consider the growth forecast of that company for the year or for the following quarter. But when it comes to collectibles, and we've seen some collectibles do incredibly well over 2020, but just like anyone who might have invested in, you know, some Beanie Babies, for example, not all of them are doing so well. So for some of those investors who are getting involved into this space, how do they navigate around that potential volatility or the fact that, you know, someone might not find that painting or that car to be that valuable anymore two or three years from now?

GEORGE LEIMER: Yeah. I think what is absolutely the same about the items that we offer investments in, and the similarity between those and investing in a company, right, is that information these days, there's no inside information these days. And so the people that are passionate about these items often know just as much about these items and the sort of investable nature of these items as people that are able to afford to buy the item-- buy the item outright.

And so I think a lot of the same process happens. And I think if you talk to people that are heavy users of our platform, you'd be astounded at the amount of research and knowledge that they have about each of these items and the level to which they go to understand them. The other thing that I would say about these items that's interesting is that the nature of these items is largely immutable.

In a lot of ways, in ways that companies aren't-- so a company can change its management team, a company can change its focus. The competition can change. But the item-- that Kobe Bryant floor will be that Kobe Bryant floor. We're going to store that floor and care for it. And the nature-- the very nature of that item will be the same today, tomorrow, 10 years from now, 20 years from now. And so I think that, coupled with the fact that our users use information in the same way they use it to value a company is sort of the winning formula for making the right pick and investing in the right item.

KRISTIN MYERS: What you're saying there-- no, go ahead, Alexis.

ALEXIS CHRISTOFOROUS: Well, I was just curious about NFTs in the time we have, and wanted to know if these non-fungible tokens or these digital assets are part of your strategy going forward.

GEORGE LEIMER: Yeah, look, I think NFTs are an emerging asset class. I think, like any asset class, there's going to be examples of NFTs that land across all parts of the spectrum. I think NFTs are actually very complimentary of what we do at Rally. We're excited about them. And we think that NFTs largely prove the point for Rally's reason for being, right, as you've noticed.

These NFTs are starting to increase in value. And just like a Honus Wagner baseball card, for example, in a lot of cases, the value of these NFTs are starting to outstrip the ability of the normal, everyday person to participate in that. So I think we're watching it very closely, and I think-- you know, I think it's fair to say that at some point, NFTs will fit into the strategy.

KRISTIN MYERS: George, I want to ask you one last quick question here-- you know, I think when most folks collect something-- a car, wine, art, for example-- they're also interested in being able to see it, being able to touch it, for example. But of course, your investors are not really going to be able to do that, which brings me to an item that you guys have going here.

It's a triceratops skull worth almost $300,000. Talk to us about that item and again about, for example, some of those investors who were never going to be able to see some of the items. Where is it stored? Where do they live?

GEORGE LEIMER: Sure. Sure. Well, you brought up my favorite item, by the way. That by far is my favorite. I think there's two things-- one is we have a museum in Soho in New York City where some of the items are housed. And I think one of you've been there. So I think that's one thing.

And I think increasingly, what we're going to do is lean into physical experiences and partner with a number of institutions. And then you sort of let these assets be shared and seen. And in the case of this asset, this asset's actually in an archeological museum in Utah. So it can actually be seen and viewed. And I think increasingly what we will do, both through our own facility, and our own museum in Soho, and partnerships is make these items available to the public to be viewed.