What is Masterworks stock price, and are they publicly traded? Investors cannot purchase Masterworks because they are a private company.
Have you heard of Masterworks? This company is unique. It’s a new way to invest. And if you’re looking for more unusual ways to invest, this may be a company that would interest you. Investing doesn’t have to be just stocks, bonds, and options. There are many neat ways to invest.
Prepare to learn about an all-new form of investing: artwork! Investing in artwork is nothing new. But the way that Masterworks is doing it certainly is. Masterworks.io is a platform that allows normal people like you and me to invest in fine art pieces. I’m not saying the site allows you to buy the Mona Lisa, but maybe a small part of it one day.
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Table of Contents
Masterworks Introduction (No Stock Symbol)
Masterworks focuses on enabling those who cannot afford multi-million dollar art pieces to own a small fraction. Think of this like buying fractional shares in a stock like Amazon (NASDAQ: AMZN). As the underlying asset’s value rises or falls, so does your fractional piece.
Masterworks.IO was founded back in 2017 by current CEO Scott Lynn. What was the reasoning behind starting a crowdsourced investing platform in fine art? Lynn realized that fine art produced higher risk-adjusted rates of return than other assets. But he also realized that fine art has high entry barriers for normal investors. However, there’s no masterworks stock.
Thus, the crowdsourcing platform was born! Fine art is a $1.7 trillion global industry that Masterworks plans on disrupting. According to Artprice, which tracks art investing, the market has outpaced the S&P 500’s returns by nearly 180% since 2000. The opportunity is there. And the best part is, you don’t have to know a thing about art to invest in it!
Investing in Masterworks Stock
As investors, we love seeing these first-mover companies change industries in disruptive ways. These companies always make the best long-term investments, especially if the brand becomes synonymous with the product. Unfortunately for investors, Masterworks is not a publicly traded company right now.
You will not find any Masterworks stock trading on any stock markets now. Masterworks is still quite a small company. So perhaps once it grows larger, it will consider an IPO. For now, Masterworks has received plenty of private investment funding. As a result, the company has certainly made an impression in the private equity market. Still, CEO Scott Lynn has shown no signs of wanting to take Masterworks public and is focused on growing the platform as a privately owned company.
How Do I Join Masterworks?
Here’s the interesting part about Masterworks: membership is only by application. To begin investing in fine art pieces on the site, you must fill out an application form.
It makes sense if you think about it. There are limited quantities of fine art pieces worldwide, and Masterworks is trying to keep unscrupulous investors out of the market. This special membership also adds to the prestige of Masterworks and the industry that it deals in.
Another reason Masterworks has limited the number of users because it limits how much of each piece an individual investor can own. Masterworks members can own no more than a 10% stake in each piece of art.
If the site had ten million users, it might be difficult for users to invest in any art at all. It’s unlikely to open up its registration to everyone until Masterworks can scale up to a larger company and obtain more art pieces.
You can join Masterworks if you live outside the United States. Many stock brokerages that are based in America do not allow international users. Masterworks welcomes them with open arms! As of this writing, one thing to note is that Masterworks did require a formal phone interview before being accepted as a member. It does make things a little more difficult logistically if you live abroad. But it’s nothing modern technology can’t solve! But there’s no Masterworks stock to buy.
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How Does Masterworks Work?
If you do get approved by Masterworks to create an account, then it’s time to start investing! Well, not exactly. First, you have to add some funds to your account. And then decide on which piece of art you want to invest in. Masterworks do a great job of providing background information about the art and the artists themselves. The company completely understands that many investors don’t know anything about art, even though they want to invest in it.
Masterworks’s internal research teamcurates all the pieces of art the company buys for its investors. The company uses data analytics and market sentiment to determine which artists have momentum. This provides an insight into which artist’s work is likely to rise in value.
Once the piece is chosen, Masterworks will buy the physical piece of art and store it in a secure location. Masterworks aims to hold each piece of art for 3-10 years. At this point, it will look to sell the piece for a profit. This is how the company pays out its pro rata proceeds to its investors.
If Masterworks cannot find a suitable buyer, it could put the piece up for auction. I wonder how Masterworks stock would perform in light of how they invest.
Return on Investment
If you believe in the piece of art you are invested in, you will likely see the largest return if you wait for Masterworks to sell the piece. Masterworks also understands that not everyone has an investing horizon of ten years. The site also offers a secondary market where users can sell their stake in a piece of art to willing investors. This feature is only available to US investors now, although Masterworks is constantly working to update its platform.
Does Masterworks Charge Fees?
Yes, like any other brokerage or investing platform, Masterworks makes much of its revenue from fees. Masterworks charge an annual account management fee of 1.5%. This is paid as equity and requires no out-of-pocket charges to the user. Masterworks’s second fee is that it takes a 20% commission when it sells a piece of art, assuming it has increased in price. These fees are unavoidable and are used by the company to pay for expenses such as art insurance, transportation, and safe storage.
Is Masterworks Stock Legitimate?
Of course! Masterworks certifies that all the art pieces it purchases for investors are completely real and not counterfeit. If you are concerned about owning a stake in the art, Masterworks files its shares with the SEC, so the entire investment process is regulated and carefully observed. It is certainly a different way of investing, but Masterworks is a legitimate company with many satisfied users already on the platform.
Stock Signals & Alerts
Art is not the only thing you can buy fractional shares of. Most US-based stock brokerages will now allow investors to buy fractional shares of stocks.
This only benefits investors who wish to buy an expensive stock like Amazon or Alphabet (NASDAQ: GOOGL), where one share can go for several thousand dollars.
Another way you can buy fractional shares of an asset is cryptocurrency investing. Most people do not have $50,000-60,000 just sitting around to buy a whole Bitcoin.
Instead, we can keep buying satoshis, which are fractional increments of Bitcoin, until eventually, we have either a whole coin or a diversified portfolio of crypto tokens. Just like with art investing, the value of your fractional share of a Bitcoin rises in value as the underlying price of Bitcoin rises in the market.
Final Thoughts: Masterworks Stock
Masterworks is a fascinating company that’s disrupting the art investment industry. Investing in art has been around in various forms for centuries, but with Masterworks, it is going fully digital. Being able to own a stake in a world-famous Banksy painting is mind-boggling. Masterworks aims to bring art investing to regular investors like you and me.
The platform is proving that you do not need to be a billionaire to invest in fine art pieces and is bringing an awareness of art into the investing community. Unfortunately for us, Masterworks is not a publicly traded company yet. Since Masterworks is only about five years old, we could see this platform going public at some point in the future! However, there’s no Masterworks stock now.
