I Own Vernon Davis

Vernon-Davis-San-Francisco-49ers-Player-Wallpapers

I have no idea who Vernon Davis is. I guess he plays football. The 49ers web page calls him a “tight end” (hehehehhe). Also, I bought him through Fantex.

Back in April, Fantex opened up trading on Vernon Davis securities as the first offering on its new brokerage platform. Fantex paid Davis $4M in exchange for 10% of his earnings for the rest of his life. These were repackaged as shares that investors could trade on Fantex.

Now that I am a shareholder, I get a percentage of Vernon Davis’s earnings both present and post career. Do life insurance payouts count as post-career earnings?

Vernon Davis trading activity since IPO. Average volume: 90. Median volume: 0.
Vernon Davis trading activity since IPO.
Average volume: 90. Median volume: 0.
Unlike a reputable exchange such as NASDAQ, there are no market makers — That is, there are no brokerage firms willing to provide buy/sell quotes and hold assets to increase liquidity.

Because pro athletes tend to be prudent managers of their personal finances and have a track record of being candid about their income, I’m sure we can trust that Vernon Davis and other Fantex offerings will dutifully turn over 10% of their earnings for the rest of their lives.

Celebrity securitization is not a new concept; David Bowie issued “Bowie Bonds” against his future income to promote a new album back in 1997, well after anyone even knew who David Bowie was anymore. The bonds were later downgraded to junk status.

photo-reuters

As with any investment, there is some risk involved, and not just that of high profile athletes having a history of financial problems. The investor also assumes Fantex counterparty risk because the exchange platform is itself a startup (See Also: Mt. Gox).

See Also:
The Implications of Investing in NFL Superstars –SumZero
Fantex.com

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