Have you ever considered how emotional attachment to an investment could affect decision-making? Sometimes we may hold onto a worthless investment just because we have a fondness for the company or the memory of why we made the investment. It could be the first piece of stock you ever bought, or the remains of a company you once held dear. Or it could be something odd like stock in the Green Bay Packers.
The Packers are the only team in sports that is publicly owned. They’ve only offered stock five times in their history. For $250 a share, you could have purchased shares in the Green Bay Packers in 2012. But there are no investment return opportunities in Green Bay Packers shares, as one would expect from owning stock in a company. There are no benefits conferred onto the owner, nor is the stock itself tradeable in any way, shape, or form. In fact, there are only two benefits which come from owning this stock: receiving a stock certificate which demonstrates your support and the privilege of purchasing special Green Bay Packers memorabilia. The Packers used the money from this sale of stock to fund an expansion to their stadium. Selling stock was essentially a fundraiser.
From an investment point of view, it makes no sense to purchase Green Bay Packers’ stock, but people bought it like crazy! Why is this? Emotional attachment to what the stock represents. People want to be a part of the team, and a stock certificate is a show of proof that they support their team. And this draws on one the strongest human emotions – love. Love is typically associated with feelings of personal attachment to people, but love can fall anywhere on the spectrum from passionate affection to mere enthusiasm. And that includes feelings that go beyond people to teams, companies, brands and material goods.
From a die-hard fan’s point of view, it makes perfect sense because they are showing support and emotional investment into the team. We love to feel like we’re a part of something bigger than ourselves. We want to know that we’ve done our part. Many people thrive on that warm feeling that they get when they help out a friend or give a dollar to someone on the street. That makes us feel connected to the world around us. That feeling of connection is what motivates many people to invest and hold on to investments that are ‘worthless’ in investment terms, but full of worth in emotional ones. The Packers know this. They netted $68 million from selling ‘worthless’ stock.
PS. I am a fan of their fundraising strategy, but not the team 😉
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