Coming Soon To A Checkout Lane Near You: Stock Giftcards

Tyler Durden's picture

As we noted this morning, in the New Normal world, the only marginal buyer of Index futures are central banks [and] when it comes to individual stocks, the biggest buyer is the company itself. 

The retail “dumb money” abandoned ship long ago after watching 40% of their 401ks go up in smoke on the heels of a meltdown catalyzed by the implosion of the American homeownership dream which, thanks to the Fed and Wall Street, had been supercharged and securitized. To the extent the turmoil in September and October of 2008 didn’t drive the individual investor permanently onto the sidelines, the subsequent realization that the entire “market” is nothing but a giant casino being manipulated at every turn by greedy cabals with names like “The Cartel” finished the job. 

The world got wise to the central banker bid a long time ago and now, with Cheryl Davis Hillary Clinton’s push to bring an end to the “tyranny of the next earnings report” and thus to the practice of leveraging the balance sheet and employing financial engineering to inflate the bottom line, the buyback bid may soon be in jeopardy as well. 

So unless the US wants to go the China route and simply make selling illegal, then it may be necessary to get creative when it comes to luring mom and pop back into the game. With that in mind, we bring you the following from WSJ who reports that now, you’ll be able to buy stock in the checkout line at the grocery store. Here’s more:

Now selling at the checkout counter: breath mints, hand sanitizer and…$25 of Berkshire Hathaway stock?

 

In a new twist on the bustling gift-card business, retailers such as Kmart and Office Depot this week are starting to roll out cards that give the recipients small amounts of stock in some of the country’s best-known companies. The cards will be available ahead of the holiday shopping season at other retailers, including Safeway Inc., Toys “R” Us andLowe’s Cos.

 

The idea that shoppers might want to pick up some Apple Inc. along with their apples is the brainchild of Stockpile Inc., a Palo Alto, Calif.-based startup. Avi Lele, a former patent attorney and founder of the company, said he came up with the idea when he wanted to give a Christmas gift of stock to his nieces and nephews, and found the need to first gather personal information such as their Social Security numbers too burdensome.

 

“It is taking something complicated and expensive and making it accessible to everyone,” said Mr. Lele, who also is Stockpile’s chief executive officer.

 

The cards work like traditional gift cards but recipients receive stock instead of merchandise when they cash them in.

 

If they want, customers can swap the shares they have received for other stock.

 

Stockpile is licensed as a broker-dealer, and the Securities and Exchange Commission and other regulators have blessed the cards’ rollout. Americans could be harder to win over.

 

Only 13.8% of American families own stock directly, down from nearly 18% before the financial crisis, according to a study released by the Federal Reserve last year. Most Americans prefer to invest through mutual funds and retirement accounts.

So in other words, Stockpile wants to make stock an impulse buy, just like a Snickers bar or a cheesy tabloid. To us, that doesn’t sound like it’s conducive to due diligence, but what do we know?

And of course you’ll also be able to speculate on precious metals and index products, which is particularly amusing because what it means is that depending on where these cards eventually get sold, shoppers will be able to walk right past real gold only to buy paper gold backed by essentially nothing.

The first group of Stockpile cards to hit the racks will offer shares of 20 companies, including Coca-Cola Co., Facebook Inc., Apple Inc. and Berkshire Hathaway Inc., as well as products that follow the S&P 500 index and precious metals such as gold and silver. 

On the bright side, maybe this means the US shale complex will get to stay alive for a little while longer: if all else fails, producers could just beg Stockpile to peddle HY ETFs next to the Milky Ways.

We'll close with the following from Shirley Motyka, a 37-year-old biology teacher who spoke to the Journal:

"I have always wanted to get into the stock market business, but I honestly don’t have the time to explore what’s going on in the market trends of the day."

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JerrySpringer B All Over This Shiznit's picture

oh perfect. Gotta get this on my next tv show...gonna put the ghetto cheese story on hold

whotookmyalias's picture

Oh, wonderful. After all, what can go wrong?

 

I'm waiting for the first hostile takeover done by stockpiling gift cards.

CrazyCooter's picture

Print this baby to PDF! One day folks will look back and this HAS to be a data point that marks a top ... just unbelievable they are this desperate.

Regards,

Cooter

Save_America1st's picture

Will they have Tulip Mania gift cards next?

waterwitch's picture

People are dumb enough to buy lottery tickets. Not much difference here I'm afraid.

nuubee's picture

If we had a real market, and companies that considered dividends to their owners the most important thing rather than stock price, this wouldn't be too different than having a customer account with REI.

Sadly, that is not the case.

OrangeJews's picture

I'm still a little confused... When these schmucks get this card for Christmas or whatever and they want to sell .0000004 shares of Apple... isn't that going to actually cost them money?  Isn't this a lose-lose situation? 

insanelysane's picture

It's a huge win for the seller if the card is never redeemed or even better yet expires before it is used.

AlaricBalth's picture

Stocks and Socks

(The old monicker after the 1981 Dean Witter/Sears merger.)

bid the soldiers shoot's picture

or Big Brother arrogates the NYSE

bid the soldiers shoot's picture

trillions of dollars of stock removed from the float of all tradable shares outstanding, giving the Wall Street crooks more capital to go on their crooked way.

a win-win

aVileRat's picture

Gift cards are one of the most common instruments for "small c" money laundering. Since this is a urgent way to improve market liquidity I can see this scheme succeeding, but for all the wrong reasons.

bid the soldiers shoot's picture

does Target sell $1,000,000 cards?

Mr.BlingBling's picture

One of my favorite quips is:  the lottery is a tax on people who are bad at statistics.

         ~ Some comedian whose name escapes me.

whotookmyalias's picture

...or the mathematically challenged.  Same difference. I think a lot of people have said similar things. I still buy them when it hits $100M.  You gotta have dreams.  My dream is to piss $2 away on a little orange and white worthless piece of paper.  Makes good fire starters for your BOB or can be used as rolling paper in a pinch.

Mine Is Bigger's picture

The next step could be bond gift cards, securitized loan cards, and all sorts of derivative-backed gift cards. Anything to help the Wall Street dump risky assets on the sheeple, basically.

ParkAveFlasher's picture

By "risky", do you mean "worthless"?

flyingcaveman's picture

Big busness was pissed when laws were passed making it illegal for gift cards to expire.  Now they can sell pre-expired cards.

TongueStun's picture

sheeple sheeple sheeple.....and the Chosenite Sheeple Herders smiled as they sheared their flocks again

KnuckleDragger-X's picture

Because they'e already killed off the day trader herd, they have to go farther down the toilet. I figure we'll see ad's with Kim Kardashian soon.....

EddieLomax's picture

I hope they get someone credible to pick the stocks, like Gartman :D

firstdivision's picture

You can buy it, but never sell.  Sounds like Yellens wet dream.

thecondor's picture

Per the Stockpile website FAQ "

Can I sell my stock or buy more stock?

Yes, you can sell part or all of your stock anytime for a trading commission of only 99 cents. You can also buy more of a stock you already own, or a new stock, for 99 cents a trade."

Canadian Dirtlump's picture

HEY MONGOLOID CONSUMER! Buy this plastic card which will be scanned at the checkout, and you'll own some gold. I mean, don't go out and buy some gold or anything, use this plastic card you see in line while buying toilet paper.

TeamDepends's picture

This is the end
My only friend the end

KnuckleDragger-X's picture

+100 for the Doors lyrics.....

ghostzapper's picture

Place these right next to the Bankster debit cards they pimp to the masses that charge you ten points juice to activate the card plus monthly fees.  

corporatewhore's picture

I can't wait to pick some up at the gas station!  can i add that to my rillos and smirnoff shots?

sdmjake's picture

Just like nickel slots in the casino industry

ghengis86's picture

penny slots.  if you ever walked past those, its pretty depressing to see what kind of people are spending literally their last pennies.  no different here.

4shzl's picture

Actually, this is really brilliant.  How about some Disney or Pixar toys with chips in them that make them the equivalent of three dimensional stock certificates?  Sheeple used to be fascinated by elaborately engraved certificates -- works of of art for their safe deposit boxes.  Now you can display your "wealth" cute little toys on your mantle.  Schlockpile -- it's a winner!

NoDebt's picture

Gee, I bet the fees and brokerage costs involved with these cards are very reasonable, too.  And, of course, the store that is selling them is making no money on this- they're doing it out of the goodness of their hearts.

Love to see how many (fractional) shares of Coca Cola or Berkshire B you will actually net out of that $25 card.  I'm guessing about $18 worth, max.

Took Red Pill's picture

Or not used at all like most gift cards. According to Wikipedia "In 2012, over $100 Billion in gift cards were purchased in the US, where over 20% of those gift cards will go unredeemed or unused." $20 billion profit from nothing!

SillySalesmanQuestion's picture

Does that mean I can attend the Berkshire stockholders meeting, vote with my .01% share and meet Uncle Warren too...?

S/

NoVa's picture

these cards probably have a monthly maintenance fee, like other reloadable cash cards.

 

NoVa

 

yogibear's picture

Birkshire owns everything now. 

They should be slapped with an anti-trust lawsuit.  It won't happen while Obama is president.

BeaverCream's picture

And you get a 10% discount on these if you also get a flu shot or shingles vaccine while in store.

ZeroPoint's picture

No, they'll give you an addition 2/15ths of an Apple Stock for the vaccine. Discounts are bad.

Clowns on Acid's picture

Well if one owns their open business...one could just "expense" these stock gift cards and get the tax deduction as well. You know gift them to a Trust that you control.  

Ajax_USB_Port_Repair_Service_'s picture

Is see an add-on business for the 'auto pawn' and 'cash stores'. Redeeming stock giftcards. Service fee? Hmmmmm. How does 45% sound?

ZeroPoint's picture

I think I would rather buy 25 dollar's worth of chocolate bars. They will trade better after the dollar finally goes.

 

khakuda's picture

"Securities and Exchange Commission and other regulators have blessed the cards’ rollout"

 

...hahahaha, so much for Macroprudential regulation.  Nice job Janet, nice job.  Maybe I can get a home equity loan from the gumball machines when I exit.

TAALR Swift's picture

Well, that will upset a lot of Wall St brokers.

At least buyer get to hold documented proof company shares right in their hands, rather than a brokerage firm doing it for them and use Force Majeur when said firm goes bankrupt.

Bernoulli's picture

So this means this is a product for people who would be bearish on the stock when they buy the "stockpile" card and remain so until they "redeem" the underlying stock (because you only own the right to buy a certain amount of stock and you hope you would get as much as possible for the dollar amount) and then you flip-flop to bullish on the stock the moment you redeem it (because you want your share of the stock to go up in value)?

Buying stocks via stockpile sounds like something Gartman should do.

savagegoose's picture

i  wonder how you collect dividends?

Bernoulli's picture

You cut off the lower right edge of the plastic gift card (="coupon") and send it to Chris, VP of Customer Service, Stockpile Investments (https://www.stockpile.com/about_us)

pocomotion's picture

I went to church last Sunday.  They gave me stock in RICK for being a gooood boy.   BAHAHAHAHAHAHAHAHAHAHAHHAH