This company is offering partial ownership of Topps limited edition baseball cards

Topps is producing 10 limited-edition baseball cards to be offered exclusively for investors on the Rally platform. Rob Petrozzo, Rally co-founder and Chief Product Officer explains to Yahoo Finance how the only way for collectors to own a piece will be through investment.

Video Transcript

JULIE HYMAN: Let's turn to another issue here, and maybe a way that some people are spending their money right now. Maybe they're investing in baseball cards, people who have more discretionary income, perhaps. Because Topps, the baseball card company, is teaming up with Rally and selling-- well, they're making a total of 12 sets for 2020, limited edition sets. 10 of them will be sold in pieces on Rally.com.

Rob Petrozzo is joining us now. He's the co-founder and chief product officer of Rally. He's joining us from New York City. Rob, hopefully I've explained this correctly, that there will be these sets of baseball cards, and you can essentially buy a share in each one of them. Is that the right way to describe it?

And how much are these shares going to cost for people?

ROB PETROZZO: Yeah, that's-- thank you for having me. That's a perfect way to put it. So what we've done is that we have these 10 boxes of Topps 20-21st Edition, complete sets. It's essentially their flagship product. It's foil stamped. It's the only place it exists.

And what we've done is our platform really turns any of these really unique, one of one, tangible assets into stock. So you can buy and sell, very similar to the way you would buy and sell any equity. It runs through SEC process for qualification.

And we take something like this, which has a $100,000 value. We break it into 10,000 shares. And they're available in almost like a mini IPO on our platform at $10 a share for any investor who qualifies.

ADAM SHAPIRO: Love the idea. But who-- how do you know the $100,000 value? And especially in a year where baseball is in such-- all major sports in such disarray, how does that value maintain?

ROB PETROZZO: Yeah, so it's an interesting-- it's an interesting dynamic right now inside the collectible space as a whole. What we've seen is that there is, very similar to sort of equities or with commodities, there's this flight to best quality and to rarest and one of one. I think that what we've seen in the space is that the stars drive a lot of what's happening, whether that's on the field, off the field, whether it's part of a bigger conversation.

But with baseball back and with a lot of attention on the sport, seeing where the future is going to hold for it, seeing some of these stars really start to have breakout seasons, and starting to think about what the rookie class is going to be for the future, I think we have a lot of really educated investors who love sports. They love collecting. And they're willing to put their money sort of where their mouth is when they say this person is going to be a star in four years or five years, or the career of this star right now is only going to grow.

I think we've seen that in the entire collecting space. Particularly on Rally, when we have these one of one items that we really have to price based on what the market says it should be worth, but that's part of why we do the initial offerings, part of why we have trading on our platform as well, so that the market can truly set the price and dictate whether or not we're correct now and correct in the future.

DAN ROBERTS: Rob, Dan Roberts here. I know we're talking about baseball cards. But you guys got started with doing fractional shares in classic cars, originally called Rally Road. And I'm just curious in terms of kind of the functional aspect of once you invest in a fractional share, something like a car or a baseball card, do you find that some people want to be able to see the item sometimes or display the item in their home for a while if it's a card?

I mean, maybe a lot of the buyers here, it's strictly as an investment. But if I were going to buy a share of a classic card, I'd like to be able to hang it in my home for a period of the year. How do people deal with that? Do people have to get in touch with each other when it's six different investors own a stake in one thing? And then how are the decisions made if someone says, OK, I think this asset has accrued in value and I'd like to sell my piece?

But how do those discussions happen if say let's see if we can sell the whole car to someone?

ROB PETROZZO: Yeah, good question. And it's been a while since we've seen each other. I really like the play on beard you have right now. It's very on brand for the baseball season. So I've gotta give you credit for that.

But the way that we think about sort of the future of the space and the way we think about where this platform can go, that's kind of always an option. And we've always thought about sort of that on loan. We've thought about work with museums. We're starting to have those conversations now. We have a retail space here in New York in Soho, which as soon as the city reopens, will be welcoming visitors again to come by and see their investments and be a part of that IPO from the ground floor.

But the way we've always looked at this is that we want to sort of work with, A, the best suppliers and companies like Topps. We want to work with best-quality assets, which in this case is 10 cards that for each individual player that only exist here. We want to do things that complement collecting.

So when it comes to owning a full piece, whether that's classic cars, where we started, whether it's watches, vintage handbags, luxury, some of the things that we're building out, we want to treat these pieces as museum-quality investments. But we always want to give access to our investors. We're always doing sort of merch and sort of meet ups and sort of digital events around these items.

We always encourage buying the full item. If you can afford it, if you have the means to store and maintain it correctly, absolutely. We look at this as a complement to that, where if you want to invest in a Honus Wagner card, for example, that's a $600,000 or $700,000 card on our platform-- I would love to own that personally as well. But the next-best thing and the way to have exposure to that card, that real one-of-one, is to do it through Rally and then build your collection with the cards that you really love that are more affordable at a price point that makes sense.

JULIE HYMAN: Hey, Rob, to talk about the baseball cards in particular, how is this season affecting demand for these cards? In other words, you've got an unusual season, let's say that, to say the least, where you have abbreviated season. You have starting and stopping as we get coronavirus cases. Does that diminish the appeal around this?

ROB PETROZZO: Interestingly enough, at least what we've seen in the space, and this goes for all sports, I think, and especially for collecting, is that it's increased the demand and increased the need for the new investor, the collector to become educated on individual athletes and on the space as a whole. So what we've seen is that nostalgia has really sort of taken over. And that's a lot of what this platform is built on. You have the stars that are always going to be in the spot, like LeBron James and the-- and the Mikes Trouts who are always going to have that appeal whether there's a season or not, because they're looking at-- collectors are looking at full career.

But what we've also seen is that people are sort of starting to put together their own sort of education, their own timelines for individual players who they see a lot of potential for the future. And these are-- these are rookies. These are people who are having breakout games. They're individuals who have a small fan base.

But because of the way information travels now, if somebody goes out and hits for a cycle today and it's a name that no one's ever heard of before, we're seeing their cards and their memorabilia and collectibles really pop the next day on eBay and some of the marketplaces that exist as peer-to-peer right now. And we're always trying to sort of be part of that education cycle, and be part of that cycle of really understanding where this game is going, whether the game's actually being played or whether we're thinking about later this season or next season, and really get ahead of some of these trends before they come to the forefront.

But we're seeing a lot of like really, really educated even 12, 13, 14-year-olds really understand this game and understand what the potential appreciation is for their favorite players, who might be a little bit under the radar right now and might not be getting as much face time on TV as they would have if it was last season or potentially next season.

DAN HOWLEY: Rob, what do you do about baseball's popularity, right? We all know that it's been falling from its highs. Football is there. Basketball is continuing to do well.

And the stars aren't really marketed well in baseball versus the competing sports. I mean, Mike Trout is one of the-- a once-in-a-lifetime player, but he doesn't get as much attention as someone like a LeBron James. How do you kind of square that with the pricing for these kinds of commodities?

ROB PETROZZO: Yeah, it's a great question. I think that the way that we see sort of baseball in particular is that-- and Topps has done a great job of this as well-- is that there there's a new generation who really values the tangible piece of this game. And whether that's the baseball cards or the collectibles that go with it or some of the digital things that are being done, Topps has really gotten ahead of it with things like Topps Now and Project 2020, where they want this next generation to appreciate the tangible pieces that come with it, whether that's bringing other artists in to do some mockups on top of individual cards, whether it's companies like ours who we can go to Topps and explain what we're doing as a business and bringing that to a new generation of collectors, who maybe thinks about this just as much as a financial instrument as they do of collecting the actual tangible piece of the game as a whole.

And try and get ahead of that in a way that-- baseball doesn't necessarily live in the same sort of television world as basketball. It doesn't have the same sort of five-on-five action and game play that goes with it. But I think that what the MLB is doing in really making an initiative to go digital in a lot of different ways right now, and the way that the collectible space has kind of followed with baseball is going to help sort of pivot a lot of what they've been doing with someone my generation, the 37-year-old who loved baseball as a kid and collected cards.

I'm now getting back into it, as a lot of my friends are. And this 12 and 13-year-old are getting back into the collecting space as sort of their entry back into baseball and to following their players and getting into fantasy and doing the things that football and the NBA for the last decade have done really successfully. I think the MLB is starting to do a lot more. And the companies around them are doing a lot more to push that narrative with that younger generation.

JULIE HYMAN: All right, Rob, thank you so much. Good to see you. Rob Petrozzo is Rally co-founder and chief product officer.