In 1984, Las Vegas casino magnate Bill Pennington purchased a custom Lamborghini Turbo that had been commissioned by a Swiss auto distributor and was one of just two like it that were built.
The car was featured on the covers of several magazines and known the world over, but a year later it disappeared from the public eye for decades.
Despite rumors that it had been stolen or wrecked, it was discovered in a Nevada storage facility two years ago, where Pennington had put it sometime before his death in 2011.
It’s now worth $635,000 and sitting in a storefront in New York City where you can buy it. In pieces.
Not literally, but you can purchase shares in it for as little as $127 through an online trading platform called Rally Rd., which is headquartered above the SoHo showroom and has turned collector cars into new kind of alternative investment, regulated by the Securities and Exchange Commission. The idea was to lower the price of entry into the collector market while removing all of the hassles of car ownership.
Here’s how it works: The company identifies an investment grade car, makes an offer on it, then creates an LLC that purchases it after a public offering of between 2,000 and 5,000 shares. After a 90-day lock-out period, those shares can be traded during windows that open every month or so until the car is sold outright and the proceeds are distributed among the shareholders.
The company doesn’t charge any trading fees, but takes a commission on the initial purchase, which is rolled into the offering price, and also a position of up to 10 percent in each of the cars.
It’s an eclectic collection that includes a “7-Up” edition 1990 Ford Mustang, which was purchased for $16,500 a few months ago and now has a market cap of $20,000, a 1955 Porsche 356 Speedster and a 1991 Mitsubishi 300GT VR4.
“We try to be very diverse in what we offer, but we have very high standards,” said Rally Rd. CEO Chris Bruno.
“We focus on rarity. We focus on originality.”
Over 75,000 investors with an average age of 27 are currently using the app. Bruno said that a typical account is around $1,000 spread over several vehicles.
While some people are treating it as just another way to diversify their investments, Bruno said that many are in it because they love the idea of getting to own the cars.
“They have a very deep appreciation for the collectible cars, for the history behind them and being a part of a community that is owning, and now preserving these types of assets.”
As for when Rally Rd. decides to sell them, Bruno said the decision is largely data-driven and dictated by market trends, but someone can make an offer to buy a car outright via the app at anytime. The company then takes the temperature of the shareholders through a poll and decides whether to sell or hold.
There are a couple of dozen cars that are actively trading right now, and more being prepped for their offerings in the coming weeks. Bruno envisions the company handling well over 100 cars at a time someday, with a mix of short- and long-term investments. It also sells themed merchandise tied to each vehicle to help pay for its maintenance and promote it to help drive up its value.
Unfortunately, the shareholders never get to drive, or even sit in the cars they own. But along with the SoHo location, and more like it coming to other cities, Rally Rd. is planning to build a mega gallery with a gathering space in New York where they can hang out with each other…and their cars.