A business named Stockpile.com received regulatory approval to sell gift cards for individual stocks. Either online or in big-box stores, you can buy a $25-$100 gift card for stock in well-known companies such as Coca-Cola, BMW, Apple, Facebook, Hershey, and Google. You can also choose to apply your gift card among ETF’s for the S&P 500 stock index, gold, oil, sugar, and others. (Although several of their stocks are a little misleading, for example, Stockpile offers the car brand Lamborghini. But if you select Lamborghini shares to purchase, you are actually buying shares of Volkswagon, the parent company of Lamborghini plus ten other car brands that may not have wanted to purchase.)
Are these gift cards a good or bad gift item to buy? First, let’s consider other gift comparisons. What would you have bought instead as a gift of a partial share of stock, something useful or something trivial? Something fleeting like candy or something memorable like a concert ticket? At least a stock card may hold some value over time.
It is my opinion that the greatest value of these gift cards may be to expose someone young to the stock market and to understand a business P/L statement. But it is my experience that when introducing someone young to individual stock investing, it is difficult to sway their view away from speculation and daily price moves. This view is the opposite of becoming a profitable investor. A better gift idea may be an education about investing. For far less money than one of these gift cards, you could purchase an investing book that I recommend, “Unfair Advantage,” by Robert Kiyosaki, or even my own book.
Naturally, buying one of these stock-gift cards is exactly like opening a regular brokerage account, along with posting your personal information online with them for state and federal taxes. I consider these gift cards an entertaining novelty, only they come attached with fees and annual tax paperwork. These gift cards are not an efficient or profitable way to build savings or a stock portfolio, so I really do not see the value to them. I predict that many of these gifts will simply become abandoned accounts that are eventually confiscated by the state treasuries.