As the line-up is weighted towards prominent companies such as Warren Buffet’s Berkshire Hathaway, Apple and Tesla, this usually buys the purchaser a fraction of a share. The first roll-out offers shares from 20 different companies, plus commodities such as gold and silver and a card offering the purchaser a choice of stock.
The $4.95 cards are available in denominations of $25, $50 and $100. For those purchasing the $25 card, this is roughly equivalent to a service fee of 19.8 percent – poor value in comparison with traditional investment gateways. Bloomberg lists standard brokerage charges for the US as up to 5 percent front-end sales loads on fund purchases.
Retailers supporting the initiative include Safeway, Toys “R” Us, Kmart and hardware store Lowe’s.
Stockpile founder Avi Lele told the Wall Street Journal that he came up with the idea when he decided to give his nieces and nephews some shares as a Christmas gift, but found himself struggling with the administrative details.
“It is taking something complicated and expensive and making it accessible to everyone,” Lele says.
The cards work similarly to traditional gift cards. They are sold in kiosks and racks alongside gift cards, and are differentiated by the words “Stock” along the top so that purchases don’t confuse the two by purchasing Nike shares rather than a Nike gift card, for example.
Stockpile is listed as a stockbroker and dealer. The recipient of their cards gets stock transferred into their name by registering online. They can trade their stock using the portal, but any buy or sell transaction will incur a fee of US$0.99.
Lele told the Wall Street Journal that he hoped his cards would become a new consumer staple.
“Your grocery list,” he said, “will be bread, milk, eggs, Apple stock and gold.”