Marc Lore-backed sports stock market app ‘where Robinhood meets DraftKings,’ Mojo CEO says

Mojo Co-Founder and CEO Vinit Bharara joins Yahoo Finance Live to discuss the Marc Lore and A-Rod-backed sports stock market app, investing in athletes, and the outlook for expansion.

Video Transcript

- Welcome back to Yahoo Finance Live. Sports business may be changing thanks to Mojo. That's the first ever stock market that gives sports fans the opportunity to invest in an athlete's on-field performance much like a stock.

Already with over $100 million raised led by investors like Thrive Capital, Alex Rodriguez, Chris Rock, and more, Mojo seems poised to transform sports fandom. At least that's the hope. For more on that, let's bring in co-founder and CEO Vinny Bharara.

We've also got Yahoo Finance's Josh Schafer joining in on the conversation. Vinny, it's great to talk to you today. This sounds a bit like a cross between what we expect-- come to expect in the stock market and then sports betting. So talk to me how this exactly works.

VINIT BHARARA: Yeah, so it's a sports stock market, as you said. And the premise is for the everyday sports fan to be-- basically be able to invest in the careers of athletes like stocks. And so they can use their sports knowledge to basically pick players that they think are going to do well and profit from that. We like to say it's where, you know, Robinhood meets DraftKings, but instead of you investing in, you know, Amazon or Google, you can invest in, you know, Joe Burrow or LeBron James, players that you can see every night, that you feel like you have some knowledge about. So I think that's what we're really excited about to debut today in New Jersey.

JOSH SCHAFER: And Vinny, how does the stock price itself work? So it's not quite the same as the stock market, right, where it doesn't seem like it moves based on volume where, say, Trey Lance hurt yesterday. If everyone selling Trey Lance off, that doesn't totally tank his stock, right? It's more based on the career stats. Is that correct?

VINIT BHARARA: Yeah. So Trey Lance was down, I think, about 15% yesterday. But one of the really important premises of our market is that when you own stock in a player, you're basically guaranteed a payout based on their on-the-field statistics at the end of their career. So there's this objective, immutable formula that always anchors the value of the stock.

That's super important. We did something about 20 years ago called The Pit, which was a sports card stock market, where you could invest in athletes through trading cards, you know, in some ways. But there was always a problem there because it wasn't this intrinsic value. So for us, this idea that it's based on their career but also based on these objective stats, you know, now you know as an owner that there's this value you can rely on, and it sort of anchors how prices move.

- So it's sort of-- you know, Josh and I were talking about this, Vinny, that it feels like it's more kind of like fantasy football where you sort of bet on a player with the expectation that their stock will rise throughout the season. I mean, from a strategy standpoint, I'm just curious. Does it make more sense to be investing early on, even athletes who are earlier on in their career? If you look at somebody like Patrick Mahomes, even LeBron James you mentioned, I mean, their careers are pretty established. So the stock can't rise that much higher, right?

VINIT BHARARA: It's a good question. Two things-- I would say there's similarities to fantasy. But the big difference is that we're regulated by the New Jersey Division of Gaming.

And so here, it's not a competition. You don't have a fixed budget. It's not like you can win a prize.

On Mojo, just like in the real stock market, you can deposit $25,000, $50,000, $100,000 ultimately, and more and pick the stocks that you want. So it's very, very different from fantasy in that way. To your second question, as to, you know, which of the players' stocks that are going to rise and fall the most, it is true that if you pick the players early in their career, the penny stocks, you can make a very significant X.

For example, Tom Brady, when we back tested and simulated what would have happened, he probably would have debuted at $3, and now he's at about $180. So that's a 60x.

That being said, you can also invest in veteran athletes on Mojo because we have something called a multiplier. And that multiplier is a tool which basically multiplies your profits or losses by an X. So for example, you can choose a 10, 15x on a player. And if you would have normally gone up 5%, if you chose a 15x multiplier, you got a 75% upswing or downswing. So really, we try to make every player Super exciting for users to basically invest in.

JOSH SCHAFER: And Vinny, can you explain to us a little bit how Mojo makes money and what the expected revenue streams are for the business? We know in the gambling world, it's often, you know, I bet on a, game and I lose, and then the house is winning that money. How do you make money out of this?

VINIT BHARARA: Yeah, our primary source of revenue is a small commission transaction-- on transactions on the platform. So that's kind of how we make money. We do make a market in the beginning.

I do want to-- I think it's another core part of the value proposition is first, I mentioned the intrinsic value, the objective value that owners have confidence in that when they own the stock, there is that value. The second thing is there's always liquidity on this market. So you can always get in and out of your position at all times.

There's a price for you to do that. And we in the beginning have to kind of make sure there is a price. So we provide that liquidity mojo itself. So you have the intrinsic value, and then you have the liquidity. Those are the two pillars, in our view, of a well-functioning stock market.

JOSH SCHAFER: And you have partnerships with some gambling companies we cover here on Yahoo Finance all the time, like a Penn Entertainment and Caesars. What do those partnerships look like? Are you going to be tied to those apps at all? How are we going to kind of see those partnerships form?

VINIT BHARARA: Yeah, so in order to operate a lawful sports wagering enterprise, you have to go to every state that you want to do that in, and at most of the states, at least, you have to get a market access agreement before you can even petition the state to approve you. So we did that here with Caesars and Penn. And in New Jersey, the reason-- the way we're operating is we have a market access agreement with Caesars that then allowed us to go petition the state to get approval.

And then we have agreements with Penn and a couple of other land-based casinos in nine other states in the country. So that's kind of what the partnership is. It's basically just a market access agreement.

- Vinny Bharara, Mojo co-founder and CEO, appreciate the time today. And our thanks to Josh Schafer as well for joining in on the conversation.