Stock Gift Cards: Bringing Wall Street To The Masses
Coming to a retailer near you -- it's the stock market.
That's the plan if companies like Stockpile have their way. The Silicon Valley fintech firm is literally bringing stock trading to the local grocer or toy store by offering equity gift cards.
They're much like those offering $25 worth of food at The Cheesecake Factory (CAKE), or $150 in merchandise via Amazon (AMZN). The difference is theirs will offer small stakes in companies like Apple (AAPL), Google-parent Alphabet (GOOGL) or Facebook (FB) -- as well as the likes of Cheesecake Factory or Amazon. You could say Main Street actually is converging with Wall Street.
Stockpile's aim is to "democratize" the market, and open it to the average Joe. The company hopes to appeal to consumers' desire to get in on what very few Americans do right now: buy stakes in Corporate America in order to save, invest and prepare for large expenses later on in life such as college educations, weddings and ultimately retirement.
"Eighty-six percent of the population have never owned stock, but 93% have had gift cards pass through their hands," said Dan Schatt, Stockpile's chief commercial officer.
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Consumers simply buy the gift card at the checkout stand. Once the card is paid for, a redemption code is entered digitally with Stockpile and consumers then call or go online to register their investment.
The key to what Stockpile proposes, and what other brokers like it are offering, is "fractional" shares in stock. Instead of paying, say, the 99.43 that was Thursday's closing price for a single share of Apple, consumers could pay a convenient $25 for part of a share, or $150 for an entire share and part of another.
Stockpile spent several years ironing out the details on being able to offer partial shares of companies with the Financial Industry Regulatory Authority and the Securities and Exchange Commission, Schatt said.
It now can offer stakes in more than 1,000 stocks and exchange traded funds. For those who can't afford the $750-plus for a full share of Alphabet, they can still get in on the parent of the world's top search engine.
In case you're wondering, Stockpile has yet to offer stakes in hyper-expensive Berkshire Hathaway (BRKA) (BRKB) Class "A" shares because they now go for more than $215,000 a pop and Stockpile has to hold on to whatever portions of shares aren't sold. But partial stakes in $145 Berkshire "B" shares are readily available.
The concept of offering fractional shares is not new. Like Stockpile, San Mateo, Calif.-based Motif Investing is an online broker and offers piecemeal stakes in companies.
Motif isn't making a permanent move into the retail space with gift cards like Stockpile, though it has had promotions in the past. Instead, it offers stakes in what could be described as minifunds based around any one of 200,000 themes -- along with stakes in individual equities if one so desires. Customers can even make up their own "motif," or fund that suits their investing choices.
"We want people to build portfolios around their insights," said Hardeep Walia, Motif's chief executive.
He adds that what differentiates his product from Stockpile and other fractional share brokers is that investors are making what he calls "real-time" investments. That is, investors know the exact price of a stock at the moment they make their purchase.
Stockpile says that once a recipient of a stock gift card goes online or phones in to register the card's code, they've committed to buying the stock. The purchase price, however, is where the stock finishes at the end of the next market close. But recipients can opt for another stock when they call in if they're unsure about the one listed on the card.
Stockpile, which was founded in 2010, began offering its stock gift cards in October and already demand has blossomed, Schatt says. Cards now are available at 400 retail outlets.
They include publicly traded outlets such as Office Depot (ODP) and its OfficeMax stores, Sears Holdings' (SHLD) Kmart stores and Minnesota-based grocer SuperValu (SVU), along with privately held Safeway, Wegman's and Giant Eagle. But it won't stop there.
The company plans to expand to 14,000 retail outlets by September. Schatt says a number of big-name retailers will be included, though the company isn't disclosing now who they are. It's venturing into such outlets as privately held Toys R Us, and hopes to someday entice consumers by, say, positioning Coca-Cola (KO) stock gift cards next to Coke six-packs on the soda aisle.
http://www.investors.com/etfs-and-funds/personal-finance/wall-street-literally-meets-main-street-via-gift-cards/
That's the plan if companies like Stockpile have their way. The Silicon Valley fintech firm is literally bringing stock trading to the local grocer or toy store by offering equity gift cards.
They're much like those offering $25 worth of food at The Cheesecake Factory (CAKE), or $150 in merchandise via Amazon (AMZN). The difference is theirs will offer small stakes in companies like Apple (AAPL), Google-parent Alphabet (GOOGL) or Facebook (FB) -- as well as the likes of Cheesecake Factory or Amazon. You could say Main Street actually is converging with Wall Street.
Stockpile's aim is to "democratize" the market, and open it to the average Joe. The company hopes to appeal to consumers' desire to get in on what very few Americans do right now: buy stakes in Corporate America in order to save, invest and prepare for large expenses later on in life such as college educations, weddings and ultimately retirement.
"Eighty-six percent of the population have never owned stock, but 93% have had gift cards pass through their hands," said Dan Schatt, Stockpile's chief commercial officer.
Get instant access to exclusive stock lists and powerful tools on Investors.com. Try us free for 4 weeks.
Consumers simply buy the gift card at the checkout stand. Once the card is paid for, a redemption code is entered digitally with Stockpile and consumers then call or go online to register their investment.
The key to what Stockpile proposes, and what other brokers like it are offering, is "fractional" shares in stock. Instead of paying, say, the 99.43 that was Thursday's closing price for a single share of Apple, consumers could pay a convenient $25 for part of a share, or $150 for an entire share and part of another.
Stockpile spent several years ironing out the details on being able to offer partial shares of companies with the Financial Industry Regulatory Authority and the Securities and Exchange Commission, Schatt said.
It now can offer stakes in more than 1,000 stocks and exchange traded funds. For those who can't afford the $750-plus for a full share of Alphabet, they can still get in on the parent of the world's top search engine.
In case you're wondering, Stockpile has yet to offer stakes in hyper-expensive Berkshire Hathaway (BRKA) (BRKB) Class "A" shares because they now go for more than $215,000 a pop and Stockpile has to hold on to whatever portions of shares aren't sold. But partial stakes in $145 Berkshire "B" shares are readily available.
The concept of offering fractional shares is not new. Like Stockpile, San Mateo, Calif.-based Motif Investing is an online broker and offers piecemeal stakes in companies.
Motif isn't making a permanent move into the retail space with gift cards like Stockpile, though it has had promotions in the past. Instead, it offers stakes in what could be described as minifunds based around any one of 200,000 themes -- along with stakes in individual equities if one so desires. Customers can even make up their own "motif," or fund that suits their investing choices.
"We want people to build portfolios around their insights," said Hardeep Walia, Motif's chief executive.
He adds that what differentiates his product from Stockpile and other fractional share brokers is that investors are making what he calls "real-time" investments. That is, investors know the exact price of a stock at the moment they make their purchase.
Stockpile says that once a recipient of a stock gift card goes online or phones in to register the card's code, they've committed to buying the stock. The purchase price, however, is where the stock finishes at the end of the next market close. But recipients can opt for another stock when they call in if they're unsure about the one listed on the card.
Stockpile, which was founded in 2010, began offering its stock gift cards in October and already demand has blossomed, Schatt says. Cards now are available at 400 retail outlets.
They include publicly traded outlets such as Office Depot (ODP) and its OfficeMax stores, Sears Holdings' (SHLD) Kmart stores and Minnesota-based grocer SuperValu (SVU), along with privately held Safeway, Wegman's and Giant Eagle. But it won't stop there.
The company plans to expand to 14,000 retail outlets by September. Schatt says a number of big-name retailers will be included, though the company isn't disclosing now who they are. It's venturing into such outlets as privately held Toys R Us, and hopes to someday entice consumers by, say, positioning Coca-Cola (KO) stock gift cards next to Coke six-packs on the soda aisle.
http://www.investors.com/etfs-and-funds/personal-finance/wall-street-literally-meets-main-street-via-gift-cards/
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Do you have insomnia X? What are you still doing up?
Interesting article.
It is interesting. I'm all for it. While stock ownership is small, mutual and exchange traded funds are much more common for saving for home, education, life goals, health savings, and retirement. A majority of all Americans are investors. Owning shares or partial ones in individual stocks like this is great. Its so much better than buying government bonds, it gives people experience in the markets from childhood, The more people who use this to directly own business see the effects of things on the markets the more pro business most of them will become as they realize that their personal well being is directly tied to corporate America's well being. That this avoids a commissioned brokerage account is nice too.
I don't think it will do very well but I could be wrong. Years ago savings bonds were a popular gift but with near zero interest rates that died out.
Savings bonds died out because people couldn't go to their bank and buy them there while doing other business. I used to buy e-bonds for my nieces on their birthdays and each Christmas. Obama took that away. Now we have to buy them directly from the federal government by mail or on line. All because lord Barry didn't want investor owned banks to earn any commission or profit from the sale of them. So, now I don't buy them any more.
I have an online Treasury account and the site is a pain to use. When interest rates dropped I quit buying T bills and moved elsewhere and I sure don't miss using that crappy site.
I still have a bunch of Series E savings bonds I bought between twenty and thirty years ago that are paying about four percent interest.
X - my understanding as to why the process for purchasing savings bonds changed from paper to electronic was to reduce the cost for printing and maintaining the bonds, saving the taxpayer's over $70 mil within the first 5 years. I thought saving us money would be something you would support.......
I like having the hard copy piece of paper. Its my preference. Its hard to give a gift of something electronic. It's nicer to be able to show the person receiving it what they got and letting her parents put it in their safe or safety deposit box. I still believe that the switch had more to do with avoiding banks than anything else. This happened about the same time the regime cut the banks out of student loans.
Me too! There is an option to print off a gift certificate to give to the recipient prior to them receiving the bond electronically. Just an FYI. :0)
I could get a paper gift certificate from the bank too until the paperwork with the real bond arrived. Now it doesn't. Besides, I'd far rather deal with people at my local bank I know than deal with the federal government in any way. Now, I'll just buy those stock market gift certificates instead.
I'm going to check out local stores and see if these cards are available here yet. I hope this idea to take investing to the masses everywhere is a big success.
It will be interesting to see how these do as Christmas gifts.