This review takes a close look at Otis, a platform for investing in collectibles. I’ve always been a collector, starting with what little money I had as a kid. Now, as an adult, I can indulge in buying those things I once dreamed of owning, like retro Jordans and He-Man figures from the 1980s.
Back in high school, I remember shelling out a few dollars for a pack of Topps baseball cards, hoping to find a Ken Griffey Jr. rookie card. Although that card never turned up, the thrill of opening each pack was unforgettable. Today, a top-condition Griffey card sells for about $1,500, a stark increase from its value 25 years ago.
In 1993, a real treasure surfaced in my grandparents’ garage in Honolulu—a part of my father’s 1956 and 1957 Topps and Bowman baseball card collection. Despite a bug problem, the cards were in good shape, and I preserved them in plastic sleeves and shields. Regrettably, we discovered that many of my father’s American league cards, including several Ted Williams cards, were missing, likely thrown out by my grandparents.
After experiencing a dip in the mid-90s and early 2000s, the collectibles market has rebounded. This resurgence sparked my interest in Otis, a platform that allows people to invest in “cultural assets” like art, sports memorabilia, and rare comics through an easy-to-use mobile app.
Otis, launched in 2018 by Michael Karnjanaprakorn (who also founded Skillshare), aims to make investing accessible by offering fractional shares of expensive assets. Here’s how it works: Otis acquires cultural assets from various sources, these assets are then securitized with the SEC and divided into shares. Every week, new assets are made available for purchase, and users can also buy and sell shares among themselves.
Investing with Otis offers a broad array of assets, from Banksy paintings to LeBron James rookie cards. The platform provides a novel way to diversify portfolios, especially appealing given recent market volatilities. Art and collectibles have shown to hold their value well and aren’t as tied to the fluctuations of the S&P 500.
One significant advantage of Otis is its trading platform, which addresses the typical liquidity issues of art and collectible investments. Trades are executed weekly, allowing for asset liquidity—a notable feature given the platform’s recent launch.
However, there are some challenges to consider. The asset types available, like sneakers and sports cards, can be volatile. Also, the platform itself is still relatively new, which may affect liquidity. There’s also a lock-up period for newly purchased shares, which might deter those looking for quick liquidity.
Investing through Otis is different from traditional methods—you don’t get to physically own the items. Instead, Otis stores these assets and has plans to display them publicly after the pandemic restrictions are lifted.
Financially, Otis makes money by charging a sourcing fee for the assets it acquires and a cut of the profits when assets are liquidated. It’s transparent about these fees, which are detailed in their offering circular with the SEC.
The potential of the collectibles market is enormous, with the sports memorabilia market alone poised to top $15 billion. Sneakers and art are also rapidly growing sectors, promising for those interested in these types of assets.
For me, collecting is more than just an investment—it’s about reconnecting with the joys of my youth and preserving those memories through tangible items. It’s thrilling to think that the pieces I’ve collected could someday be as valuable to my children as they are to me now.
Otis presents an intriguing opportunity for those looking to invest in the collectibles market without needing to own the physical items outright. Whether you’re a seasoned collector or a newcomer curious about investing in cultural assets, Otis offers an innovative platform to explore this unique market.
