Rares turns sneakers into stocks

Future. Rares is acquiring rare, high-value sneakers so that they can turn them into “mini-companies” users can invest in for as low as $25. That fractional ownership will hopefully net users a profit as the shoes appreciate and Rares sells them off down the line. With several other companies also getting into the alternative asset game, the ability to invest in shoes, clothes, cards, etc., may be the perfect gateway into learning to invest with disposable income while still young.

Fractional footwear
Rares is unboxing a new asset class.

• The company, founded in June 2020, lets users (those over 18 and who live in the U.S.) invest in a pair of rare sneakers that the company acquires (and expects to appreciate in value).
• By filling the shoes with the SEC to make it a tradeable item, it splits into thousands of shares and then does an IPO on its platform.
• Investors get a payout when Rares liquidates the shoes once they’ve peaked in value — typically 6 to 24 months after Rares acquires them.
• Users can also trade their shares to other users instead of waiting for Rares to liquidate the shoes.

To give an example of what Rares offers, it acquired the Air Yeezy 1 Prototype sneakers that Kanye wore at the 2008 Grammys for $1.8 million — the most ever paid for a pair of shoes. The company then split the shoes into 72,000 shares that it sold for $25 per share.

Streetwear suits
Founder and CEO Gerome Sapp (who used to play in the NFL for the Baltimore Ravens) started the company to give Millennial and Gen Z investors an asset option that wasn’t the usual stocks and mutual funds. The idea being that some people would rather invest in something that they understand and have an appreciation for. “The cultures and communities that made the sneaker industry what it is today — that made it popular and valuable — at some point were left out of the secondary appreciation of these sneakers.”

Eventually, Sapp wants to lower the buying threshold to $1 so that anyone can start investing. He also wants to expand beyond sneakers into anything else that can be considered an alternative asset — “high-end handbags or vintage tees or collectible cards” — to become the “Amazon of alternative asset investing.” He may have some competition.