Stock prices are constantly changing and don't lend themselves to the clean $25 and $50 denominations that are great for books, movies and meals. For example, one share of Alphabet (parent company of Google) sells for over $750, while Tesla is over $200 and Apple and Facebook top $100.
To enable gifting, Stockpile had to develop technology around fractional shares, so that a $25 Tesla card would allow for ownership of less than an eighth of a share. Additionally, Stockpile worked through the regulatory process to become a registered broker.
"We did a lot of work to get all the pieces in place to have a consumer product at a price point that would be of great value, that would be sound with regulators and could get distribution where people are in their daily lives," said Lele, who was a lawyer for over 15 years before co-founding Stockpile in 2011. "Normally you go to a brokerage if you want to buy stock. Here, we come to you wherever you are."
Stockpile's top e-gifts
2. Walt Disney
8. Berkshire Hathaway
In retail stores, Stockpile sells cards for 20 different companies, including nontech brands like Starbucks, Walt Disney and Pfizer as well as exchange-traded funds for gold and the major stock indexes. It also has a card that allows consumers to choose their favorite stock.
Cards come in $25, $50 and $100 denominations. The amount the buyer pays for the card includes an additional $4.95 to $7.95 charge to cover interchange, brokerage fees and the costs of stocking the card.
For gifters who want to pay lower fees and don't care about the physical card, Stockpile also sells e-gifts, which cost $1.99 for cards $100 and under. That option has the added benefit of offering about 1,000 available names.
To turn the gift into actual stock, the recipient goes onto Stockpile.com, creates an account and enters the code. From there, the account can be used like a typical online brokerage, only that buying and selling stock costs just 99 cents per transaction compared with $7.99 at E-Trade and $8.95 at Charles Schwab.