Should the dealer-underbidders on BigE's coin recuse themselves from brokering a future sale of the
Longacre
Posts: 16,717 ✭✭✭
I hope that BigE does not take offense to this thread, but I think the facts are well known on these boards. As I understand it, BigE purchased a raw coin from a Stack's auction for around $10,000, and it got certified at a higher grade level, and the sheets now value the coin at around $30,000. Supposedly there were many very prominent dealers at the Stack's auction who viewed the coin, and either did not bid on it, or were underbidders during the auction. As an underbidder, obviously you do not think the coin has as much value as the person who ultimately won the coin.
Let's fast forward, say, six months, and BigE would like to sell the coin. Because pretty much every prominent dealer in this coin series was at the Stack's auction, they would be likely candidates to broker a sale transaction.
Given that the dealers either passed on the coin or were underbidders on the coin, what obligation do they have to recuse themselves from brokering a future sale? Does it matter that the dealer thought the coin was a PF65, rather than its current PF66 status? Does it matter if the dealer is brokering the coin to a long-time client? Does it matter if the dealer is brokering the coin to another dealer (someone who was not at the original auction)? Does it matter if the dealer is brokering the coin to a new client?
Let's fast forward, say, six months, and BigE would like to sell the coin. Because pretty much every prominent dealer in this coin series was at the Stack's auction, they would be likely candidates to broker a sale transaction.
Given that the dealers either passed on the coin or were underbidders on the coin, what obligation do they have to recuse themselves from brokering a future sale? Does it matter that the dealer thought the coin was a PF65, rather than its current PF66 status? Does it matter if the dealer is brokering the coin to a long-time client? Does it matter if the dealer is brokering the coin to another dealer (someone who was not at the original auction)? Does it matter if the dealer is brokering the coin to a new client?
Always took candy from strangers
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
0
Comments
Valid question, but I would advise BigE to simply consign the coin to a major auction house himself and cut out the middleman. On a $30K coin, he could get 102% of hammer.
Now if they are puffing it up as a great coin that's all there for the grade, that's another story; that wouldn't pass the smell test assuming they saw it raw on the Stack's auction and passed at 64 money.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Don't hate on Moderns. Your Kids and Grandkids are going to pay out the A$$ for them when they're your age!
Collecting Morgans in Any Grade
<< <i>Valid question, but I would advise BigE to simply consign the coin to a major auction house himself and cut out the middleman. On a $30K coin, he could get 102% of hammer. >>
Isn't the auction house a middleman?
Aren't there dealer's out there who would be willing to place the coin with a collector for less than a 13% fee?
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<< <i>Valid question, but I would advise BigE to simply consign the coin to a major auction house himself and cut out the middleman. On a $30K coin, he could get 102% of hammer. >>
Isn't the auction house a middleman?
Aren't there dealer's out there who would be willing to place the coin with a collector for less than a 13% fee? >>
Sure, but where will the coin realize the highest return? It is possible that a dealer could realize more than a major auction venue, but usually only if the dealer has a client in search of that particular type of coin. I feel that the true value of a coin is best realized when several interested parties are competing with a bidding paddle. Regarding the 13% fee, that's a tax on the buyer, not the seller.
I would say that the product was previously a raw, proof seated dollar of questionable tone, and now that the coin has been slabbed, even though nothing else was done to it, the product is now an NGC Proof-66 seated seated dollar. Dealers and collectors are now invited to reexamine the coin and may or may not change their opinion.
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<< <i>Valid question, but I would advise BigE to simply consign the coin to a major auction house himself and cut out the middleman. On a $30K coin, he could get 102% of hammer. >>
Isn't the auction house a middleman?
Aren't there dealer's out there who would be willing to place the coin with a collector for less than a 13% fee? >>
I think that the greater fool factor has a better chance of netting more money in this case.
Weren't the dealers, who passed, giving OPINIONS?
How much time did each dealer spend looking at the coin? In the right light? Were they tired?
Sorry Longacre, I think this particular question is silly.
I've been told I tolerate fools poorly...that may explain things if I have a problem with you. Current ebay items - Nothing at the moment
<< <i>
<< <i>
<< <i>Valid question, but I would advise BigE to simply consign the coin to a major auction house himself and cut out the middleman. On a $30K coin, he could get 102% of hammer. >>
Isn't the auction house a middleman?
Aren't there dealer's out there who would be willing to place the coin with a collector for less than a 13% fee? >>
Sure, but where will the coin realize the highest return? >>
So you think if it goes to auction it won't be purchased by a dealer?
<< <i>Regarding the 13% fee, that's a tax on the buyer, not the seller. >>
Is this a joke?
So you think if it goes to auction it won't be purchased by a dealer?
If it goes to auction it could be purchased by a collector or a dealer. Who knows? The only thing that is certain is that there will be fair competition and at least he could set a reserve.
.......of course the alternative would be to place it with a dealer at a fixed price that is commensurate with what could be expected at an auction. My previous comments were made in the context of Longacre's original question. It just seems easier in this particular case to consign it to an auction. Or.....better yet........keep it in his collection forever!
If BigE were selling a house he bought at a foreclosure auction, should realtors who were not willing to buy his house out right at the auction recuse themselves from brokering a sale?
I don't think the dealer's prior opinion of the grade of the coin should make any difference. Dealers frequently represent coins on behalf of consignors that they would not purchase for their own behalf. Having passed on purchasing the coin outright does not exclude taking the coin on consignment (or even purchasing it outright at some later date).
But even before we get to that point, we don't have any idea why the other bidders did not bid higher for the coin. There are many reasons why they may have passed (or not bid higher) on this coin at Stack's other than a lower opinion of its grade. Perhaps there were other coins in the sale that were preferred at the time. Perhaps they agreed with the grade but were concerned about its gradeability (e.g., due to the color) and didn't want to take that risk. Perhaps, they had better opportunities with their cash than tying it up in a raw coin while at the grading services (which are inconsistent to say the least). Maybe the coin couldn't be viewed well through the auction flip.
Valid question, but I would advise BigE to simply consign the coin to a major auction house himself and cut out the middleman. On a $30K coin, he could get 102% of hammer.
Actually, with the right middleman, BigE could consign the coin to a major auction house and get even more than 102% of hammer.
WH
<< <i>I don't think many looked at the coin in person though, because it is really not toned. It has only a light purple haze around the rims and is really brilliant >>
You mean the Stack's images were juiced? I'm shocked.
Russ, NCNE
roadrunner
Please explain why you think these dealers have any obligation to do or not do anything in some future sale of this coin.
Check out the Southern Gold Society
<< <i>Given that the dealers either passed on the coin or were underbidders on the coin, what obligation do they have to recuse themselves from brokering a future sale?
Please explain why you think these dealers have any obligation to do or not do anything in some future sale of this coin. >>
If they broker the coin in the future, I wonder how it will be represented to a potential purchaser. Does the dealer say that he viewed the coin raw and thought it was an $8000 PF64 coin at best, or does the dealer sell it as a PF66 because of the plastic? Dealers always rant and rave about how plastic is evil and collectors are wimps and cannot buy raw, so I wonder how the coin should be presented. If a dealer has any discomfort, maybe he should not agree to broker the coin.
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
Either I missed it or you didn't address why you think these dealers have any sort of obligation.
Check out the Southern Gold Society
<< <i>Now I'm all confused!
Either I missed it or you didn't address why you think these dealers have any sort of obligation.
I think that Longacre's point, and he is perfectly capable of speaking for himself, is that several dealers are on record as saying the coin is a pig, and it would not look so good if they were seen decrying it as a pig and then later had the same coin on their website described as a "finest known, PQ for the grade, fantastic opportunity for the savvy seated dollar collector, etc." Of course, I may have missed the point.
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<< <i>Now I'm all confused!
Either I missed it or you didn't address why you think these dealers have any sort of obligation.
I think that Longacre's point, and he is perfectly capable of speaking for himself, is that several dealers are on record as saying the coin is a pig, and it would not look so good if they were seen decrying it as a pig and then later had the same coin on their website described as a "finest known, PQ for the grade, fantastic opportunity for the savvy seated dollar collector, etc." Of course, I may have missed the point.
I just saw this and it sums it up well. DaveG--as for obligation, it is certainly not a legal one, but should be a moral one, especially given RYK's nice summation. Hopefully there are some morals left in numismatics.
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
<< <i>I just saw this and it sums it up well. DaveG--as for obligation, it is certainly not a legal one, but should be a moral one, especially given RYK's nice summation. Hopefully there are some morals left in numismatics. >>
That's what I thought. And I go back to what I said originally. If such a dealer who saw it and passed on it merely offer it without comment and don't hype it, I see no problem. But if they make it sound like it's a fabulous coin and all there for the grade and all that...it would stink.
<< <i>
<< <i>I just saw this and it sums it up well. DaveG--as for obligation, it is certainly not a legal one, but should be a moral one, especially given RYK's nice summation. Hopefully there are some morals left in numismatics. >>
That's what I thought. And I go back to what I said originally. If such a dealer who saw it and passed on it merely offer it without comment and don't hype it, I see no problem. But if they make it sound like it's a fabulous coin and all there for the grade and all that...it would stink. >>
At least I don't confuse everyone around here.
Didn't wanna get me no trade
Never want to be like papa
Working for the boss every night and day
--"Happy", by the Rolling Stones (1972)
Are you suggesting that all dealers have no standards or criteria for the kinds of coins they will handle and recommend to clients?
Do you think that we all unquestioningly accept and then sell the TPG opinion of a coin whether or not we agree with it?
Do you think that we all just buy whatever we can and try to sell it to the next collector who walks through the door?
I guess you must, or you wouldn't have posted this thread.
I think many dealers have pondered the coins that got away... the ones that they saw and perhaps at the time, and for whatever reason, there may have been doubts about either the coin itself, the market or perhaps they did have anywhere to go with it timely...
Does create a moral conflict if a second opportunity comes to broker a sale of a coin they were the under bidder? I don't think it does...
Experience the World through Numismatics...it's more than you can imagine.
Speaking of which, whatever happened to Biddlesbank?
<< <i>Speaking of which, whatever happened to Biddlesbank? >>