CNG-112 - Mr Shill revealed

Judging from the bidder handle this is not a newcomer who didn't know about the bidding steps and how the cng auctions work. He was hoping to get clio'd but got stuck with his/her own shill bid.

 

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Blimey. What did he buy?

 

If it was his coin, he is paying the big bid to himself minus buyers fees and other charges.

What does that work out to with CNG (too lazy to figure it out).

John

 

I dont think I would call it a shill exactly. Most auction houses allow a consignor to bid on their own lots, but as @Theodosius already pointed out, they still have to pay the commission (if this is indeed what happened).

 

That I did not know... how is that not considered a shill? The only reason I can see for bidding on your own lot is to raise the price? Or am I missing something?

 

Its kind of like placing a reserve on the lot. The house will open bidding at whatever price they deem necessary to garner bids. If the consignor is not happy with the current amount they can bid on it themselves in the hopes someone will pay one increment above them. If that doesn't happen the house still gets their commission whether or not the lot traded hands.

Its been common practice as long as I remember, and not just the coin industry. The alternative is that the house places a reserve on the lot. If said reserve is not met the coin will not be invoiced but the system will still show someone is high bidder. That leaves confusion and frequent bad feelings, a topic of which has been discussed here many times (probably without people knowing what exactly was happening).

You will note that some houses will advertise that their sale is 'without reserves'. Also, if you have ever been to a live auction or watched one online, you will see the auctioneer bidding on behalf of the house, and many times saying some phrase like 'sold to the house'.

 

When I think of a shill, I think of a situation where the shill bidder has inside information on the size of maximum bids placed so he can bid just under that maximum insuring the lot will go for the full greatest bid. The shill takes no risk of having to buy the lot since he knows there is a bid higher. This hurts people who bid very high for a coin they want very much but that receives no other bids. Lets say you bid $1000 for a coin worth only $100 to most people but is needed for your set completion. You suspect a shill when the lot receives a bid of $990 from the house or the seller's agent. Is this wrong?

 

That's what always bothered me about Frank's auctions. In his last I spotted a stupid rare coin (probably 2nd known) that was misattributed, which I bid 12 times opening, later I learned the high bid was 40x. The point is if I was a malicious person I could have bid 39x just to be spiteful. Seems too easy with his setup, especially on higher priced coins.

 

Does anyone have a certain auction company where their maximum bid, almost without fail, always gets hit (making me pay my max price)? Because I do, and it only happens with this one particular auction house. Now, I still do business with them because, even with this anomaly, my max price is still fairly reasonable, but I still find it suspicious.

 

Thats new Leu. Bunch of crooks.

 

Just to clarify, I am in no way blaming cng, I am convinced they don't manipulate bids, many times Clio gets stuff just above the opening while I am sure he bids 5x more. I am not aware if cng encourages or allows consignors to bid on their own stuff. In most countries this would be illegal and even if the consignors who practise such methods pay the buyers fees this doesn't make it legal or ethical

 

I've had it happen with CNG

 

You hit the nail on the head.

 

I doubt this was a shill bid. The estimate was $15,000 so $21899 isn't excessively over the estimate. I often time bid odd numbers. At this level the bid increment is probably $1000, maybe more, so if one bidder bids $21899 and the underbidder bid anything between $21000 and $21898, the high bidders bid would be bumped to his maximum of $21899.

 

Why not just up the reserve to an acceptable amount?

Well that looks like the worst type of example - and should be considered flat out fraud. - but I also think the basic example of a shill (someone who bids on an item they own or someone they know owns.. for the sole intention of raising the hammer price.) should be considered fraudulent (and is in many jurisdictions).. although I am learning that some auctions seem to allow it.
If you won't sell for under a certain price then set a reserve.

 

The step was 1000. So the successful bidder was willing to spend 21899 but was lacking the 102$ which would have saved him from someone biding 22001$ to snatch it... I think he was just trying to make Clio/larissa/chopin/bub pay more for it.

 

At 21899, which would have shown as the current high bid, 21001 would not have been accepted. The next acceptable bid would have be 22899 which would have made the final price nearly 27500.

 

This wasn't a shill. The coin is being sold as part of the Gasvoda collection (Gasvoda owns CNG now). It was bought by the bidder 786Coins who is a well-known bidder at CNG, buying several other coins in this sale - it was not Gasvoda buying the coin back.

@pprp , what you're seeing is just very poor off-increment bid planning. 786Coins should have bid 22001 to require someone to pay 23000 hammer for the coin. Otherwise, they could have won it by just bidding an extra $101 as 21899 was their max.

 

You should not be allowed to bid on your own item.
Auction houses that allow this seem greedy and seedy to me.
Just place a reserve for the minimum you are willing to accept and
cross your fingers that more than 1 person wants it, and that it has retained
it's value in the current market.

 

I limited doing business with an Auction company that when I did have the highest bid they told me the auction company outbid me. To add injury to insult the coin is showing in coinarchives with the high bid that I placed. I was never invoiced, the company told me via email they decided to buy the coin.
The coin is still for sale by the auction house on Vcoins almost three times my winning bid and 5 times their estimate. I do very limited business with them now, I will always remember they treated that transaction, however, it has been almost two years and they still have not sold the coin.