Three Things (12/16)

Jurassic art

Ancient assets … Later this week, Rally, a platform for investing in rare collectibles, will launch its most unusual IPO yet: a partially excavated Stegosaurus fossil, nicknamed “Steg.” Discovered in Wyoming’s Bone Cabin Quarry, the fossil includes 67% of the dinosaur’s skeleton and features the distinctive back plates and spiky tail of the Jurassic-era herbivore.

Rally purchased the excavation rights for $2.25 million and will offer 200,000 shares at $68.75 each. The goal? Raise $13.75 million. Once the excavation is complete, Rally plans to sell Steg privately or at auction, with shareholders receiving a return on the sale.

Steg prospectus via Rally

The market for dinosaur fossils is booming. Earlier this year, billionaire Ken Griffin bought a complete Stegosaurus for $44.6 million, the highest-ever price for such a specimen. The high costs have sidelined most buyers, leaving fossils largely in the hands of wealthy collectors and museums. Rally's IPO changes that.

Through fractional ownership, fintech platforms are reshaping access to alternative investments. Historically, high-net-worth individuals have dominated markets for collectibles like art and fossils, drawn by their potential for diversification and long-term value appreciation. Similar to how Robinhood democratized public market investing, fintechs like Rally are able to likewise offer fractional shares in rare assets, lowering financial barriers and broadening participation in markets once reserved for the ultra-wealthy.

Virgin Galatic goes global

Italian initiative …  Virgin Galactic (SPCE) is exploring the potential to launch space tourism flights from Italy. The California-based company announced a partnership with the Italian Civil Aviation Authority to evaluate operations at the Grottaglie Spaceport in Puglia. If approved, this would mark Virgin’s first expansion outside the United States and could broaden access to European and Middle Eastern customers.

The timing reflects Virgin’s efforts to recover from financial challenges. Its stock has dropped 87% this year, partly due to a suspension of flights as the company develops a new fleet of spaceships. These upgraded vehicles are expected to carry more passengers at higher ticket prices and begin operations in 2026. Virgin debuted on the public market in 2019 as the first publicly traded spaceflight company, but its stock has been volatile. After peaking at $1,188.20 in 2021, it closed at $6.48 last week.

Image via McKinsey

Space tourism is an ambitious yet costly endeavor. Companies primarily rely on high-ticket sales—often $250,000 to $450,000—to fund operations, targeting affluent travelers. However, firms like Virgin Galactic also seek revenue from research partnerships, payload transport, and even branding opportunities.

Though valued at under $1 billion today, some forecasts predict space tourism to grow to $35 billion by 2033. This remains a small fraction of the broader $1.8 trillion space economy dominated by satellites, defense, and other sectors.

Tariff fears fuel spending

Hurried hoarding … A new survey reveals that some Americans are stockpiling goods ahead of proposed tariffs, fearing rising prices and economic uncertainty. In a CreditCards.com poll, 33% of respondents admitted to making larger purchases now to avoid future price hikes, with common items including coffee, electronics, and appliances. Similarly, the University of Michigan reported a record quarter of consumers deeming it a good time for big purchases.

President-elect Donald Trump’s sweeping tariff proposals, including 60% on Chinese imports and 25% on Canadian and Mexican goods, aim to boost domestic manufacturing but risk triggering inflation. These policies echo Trump’s earlier tariff initiatives, which caused a 10% increase in appliance costs during his first term, according to Duke University economists.

Experts warn that consumer stockpiling could amplify inflation further. “When shoppers panic-buy, shortages emerge, forcing retailers to raise prices,” one Columbia University economist told the Wall Street Journal. Economists also highlight that 10% of U.S. spending goes toward imports, meaning tariffs could quickly erode household budgets. to $198.5 million in Q3 2024, though losses widened to $47 million.

Historically, stringent tariff policies in the U.S. have had mixed outcomes. For example, the Smoot-Hawley Tariff Act of 1930 exacerbated the Great Depression by stifling global trade. Economists today warn that aggressive tariffs could ignite similar global tensions, with trade partners like Canada and Mexico already signaling potential retaliation.

While Trump calls tariffs “beautiful,” many Americans disagree. A Reuters/Ipsos poll found just 29% support tariffs that increase prices. 

One more thing: The Federal Reserve is expected to cut interest rates by 0.25% on Wednesday, completing a full percentage-point reduction since September amid surging markets and rising consumer wealth. Despite strong equity gains and improved economic optimism, the cut addresses persistent inflation challenges and soaring government borrowing costs, underscoring its impact on fiscal policy and markets.

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