Sealed bid auction for Ohio coin fund coins
kranky
Posts: 8,709 ✭✭✭
CW's editorial this week commented on the odd auction structure that will be used to liquidate the 3,400 coins and notes that make up the holdings of the Capital Coin Fund Ltd. II, the infamous coin fund financed by public money in Ohio as an investment through Tom Noe.
Wouldn't you think with coins bringing so much at auction, that there would be a "typical" auction format - a catalog of all items, offered individually, with at least open bidding? Nope.
The items will be grouped into lots of 100 items. No catalog. If you want to view the lots, you put up a $10,000 refundable cash deposit. If you want to bid, you put up another 10% deposit, and mail or fax your bid. Oh, and the seller (the state of Ohio) reserves the right to not sell any lot even if it meets reserve. Any item may be withdrawn. This is because the liquidators hired by Ohio have already accepted a bid for the entire works from Spectrum, which is equal to the total reserve amount for all lots. Descriptions of the individual items are no more descriptive than "1908 G$20 NM PCGS MS67".
Now, there ARE pictures... they may remind you of an ebay auction, though. Here's a sample. (Dialuppers be warned: very large 2.5MB image) If you want to see the list of all items, there's a PDF document available.
My commentary: this auction is structured to keep all the coins in the hands of the large players. Let's say you really would bid strong on the 1795 dollar in NGC MS66. Tough - it's lumped in with dozens of other coins you couldn't care less about. Does anyone think this format is going to get the most money for the coins? And let's say you suck it up and want to bid strong on a particular group of 100 coins because there's that one coin you have to have. Your bid might even exceed the reserve. But if the total of high bids for all lots are less than Spectrum's number, I suspect Spectrum will get the whole works anyway.
For all I know, no single coin in the fund would attract incredible bids, so it may be a moot point. But the potential for any single coin to draw spectacular bids is certainly eliminated. I seriously doubt any collector is going to want something so badly that he/she will go through all the hoops and pony up the cost for an entire pile of 100 coins just to get one coin. So to me it seems like a foregone conclusion that every lot will end up in the hands of some large player.
Wouldn't you think with coins bringing so much at auction, that there would be a "typical" auction format - a catalog of all items, offered individually, with at least open bidding? Nope.
The items will be grouped into lots of 100 items. No catalog. If you want to view the lots, you put up a $10,000 refundable cash deposit. If you want to bid, you put up another 10% deposit, and mail or fax your bid. Oh, and the seller (the state of Ohio) reserves the right to not sell any lot even if it meets reserve. Any item may be withdrawn. This is because the liquidators hired by Ohio have already accepted a bid for the entire works from Spectrum, which is equal to the total reserve amount for all lots. Descriptions of the individual items are no more descriptive than "1908 G$20 NM PCGS MS67".
Now, there ARE pictures... they may remind you of an ebay auction, though. Here's a sample. (Dialuppers be warned: very large 2.5MB image) If you want to see the list of all items, there's a PDF document available.
My commentary: this auction is structured to keep all the coins in the hands of the large players. Let's say you really would bid strong on the 1795 dollar in NGC MS66. Tough - it's lumped in with dozens of other coins you couldn't care less about. Does anyone think this format is going to get the most money for the coins? And let's say you suck it up and want to bid strong on a particular group of 100 coins because there's that one coin you have to have. Your bid might even exceed the reserve. But if the total of high bids for all lots are less than Spectrum's number, I suspect Spectrum will get the whole works anyway.
For all I know, no single coin in the fund would attract incredible bids, so it may be a moot point. But the potential for any single coin to draw spectacular bids is certainly eliminated. I seriously doubt any collector is going to want something so badly that he/she will go through all the hoops and pony up the cost for an entire pile of 100 coins just to get one coin. So to me it seems like a foregone conclusion that every lot will end up in the hands of some large player.
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
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In fact, next time I sell any coins, I am simply going to group them in lots of 100, place them in large, dark green hefty bags with a twist-o-seal, andallow large institutional buyers to shaft both me and all other bidders.
Yes, I am sure of it.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
They should have gone to Heritage and cut a 105% no reserve deal. Ohio would have fared much, much better. Of course, the politicians in charge may have wanted to guarantee that the coins were sold for a loss, in which case they have all but succeeded.
Lots of widgets in that sale. Who's got the good stuff?
<< <i>I'm willing to bet even money that Spectrum does not buy the entire deal. Anyone want to play? >>
Andy....No Gambling
Looks like some of the good stuff is gone??
Maybe not directly, but I guaranty that some major dealers bidding on the entire deal will have certain coins pre-sold to clients.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Experience the World through Numismatics...it's more than you can imagine.
you have got to love it
When did 1835 half eagles in PR 68 become widgets?
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>Widgets galore.
When did 1835 half eagles in PR 68 become widgets? >>
When they started, 10 resubmissions ago, as PR64's.
Russ, NCNE
Russ, NCNE
Experience the World through Numismatics...it's more than you can imagine.
<< <i>Why do the coins even need to be sold? I ask the question not knowing what is there... >>
for the same reason Omaha had to sell the Bryon Reed collection....
MONEY
and plus , with a "grab bag" kind of thing. It's a legal way of laundering money.
I mean , it's dirty money that needs washing, so put it out in little lots to several sources, don't let everyone in, just a select few who are PLAYERS, REAL PLAYERS. My hunch is these coins will not affect the market at all since this is not "NEW" money in the market. It's hoarded but already accounted for by the nature of the slabs.
My guess is, they will be moved around just as smooth as silk in the market by several sources over the next couple years, and will slip into oblivion.
My hope is Mr Noe doesn't spend time in jail for being politically duped by some unnamed sources. Okay, maybe he isn't perfect, but there are worse crimes than stealing money from the cash box and giving it to the politicians.... and to lock him up for 175 yrs is crazy. I still wonder what coin he had to sell to get those 500 G's to post bail.
I have a box of twenty of them under my bed.
Okay, there are some really cool coins on the first page of the auction listing and then 65 pages of "widgets galore".
It's almost like the state of OH wants to recover LESS money by auctioning it this way.
I could not agree more. I thought Mr. Albanese was involved in this.
approx 7
<< <i>It's almost like the state of OH wants to recover LESS money by auctioning it this way. Very strange >>
Yeah!! More shenanigans no doubt. I'm sure there is a reason for it and its not likely the most beneficial to the state.