Goldin Auction - Honus Wagner “Rookie Card”
 

I just watched a YouTube video this afternoon which made reference to the recently completed Goldin Auction with a large number of high-end, pre-war baseball cards. One of the biggest cards was a PSA encapsulated 1897-99 Henry Reccius Cigars Honus Wagner “Rookie Card”. If I remember correctly, the card did not meet reserve and went unsold despite a high bid of $875K. This immediately brought back memories of this card being discussed on Net54 more than a decade ago and how the dating by PSA was incorrect and the actual issue date had to be during the early 1900’s at best and possibly as late as 1918 or so. Low and behold, I found the Net54 thread, here is the link:

https://www.net54baseball.com/showthread.php?t=196820

It’s insane to me that bidders ran this card up to that level, I wonder how many did not realize the discrepancy in the date of issue. More towards the end of the description, Goldin does allude to the fact that some believe that the issue date of this card could be late 1900’s but then reverts back to most likely being a 1897-00 issue. Am I missing something, has there been more recent information that dates the card to the late 1890’s or is that date still believed to be misinformation?

We have been discussing this very question on another thread. Lots of cause for skepticism it seems. I looked for but could not find the original Hal Lewis thread about the card.

https://www.net54baseball.com/showth...hlight=reccius

Bidders might have not . "Goldin may place bids below the reserve on behalf of the Seller, either consecutively or in response to other bids."
source = https://goldin.co/useragreement

Ideally, the dating questions should have been clearly pointed out in the lot description. I have heard nothing that would make me believe that the card was absolutely issued pre-1900; perhaps if such information exists the consignor(who it appears thought the card was worth over $1 million) or the high bidder (who thought it was worth almost a million) or Goldin (who accepted the reserve) could provide it.

So they can run you up to the reserve. I am surprised there has not been more angst about this. Back in the day there might have been.

This has been researched exhaustively as detailed in Rob L's thread and in a prior thread by Hal Lewis. I very much doubt there is any additional relevant information out there. There is clearly no definitive evidence supporting 1897-99 as the issue date, although I suppose it remains possible if not likely.

Why bother with a reserve if the AH is going to bid it right up to the reserve amount? Is there something I'm not understanding here? Why not just start the bidding at the reserve price? Is it because they're afraid nobody will bid on it? To me, all the bidding before the reserve is met would just be suspect and the AH trying to hype the card. This is the part of the hobby that just isn't.

Peter,

That is a recognized practice among most major auction houses, disclosure of which is buried in the fine print of the auction rules. I characterize it as legalized fraud, as its purpose is to induce bids on the mistaken belief there is genuine interest at that bidding level.

Uh, yeah!

Why is this type of auction/sale allowed. It's basically trying to induce people with a lot of money that don't know any better to purchase something very hyped.

Why is this legal? Is this a practice/tactic auction houses like Lloyd or Christies employ?

I believe Aaron Seefeldt owned this card at one time. I am sure he could add something here.

It is employed by Christies and Sotheby's.

I like the HA method where they just disclose the reserve late in the auction process. I was unaware that Goldin Auctions did this; I think they should be more transparent and change to the Heritage method.

I get it, I was just expressing surprise it hasn't evoked more angst, as people used to bitch a ton about hidden reserves and such.

Look on the other thread I referenced, he posted there.

In their terms Heritage also states the right to bid an item up to the bid below its reserve.

+1. It’s dog shit and, while legal, ethical fraud. I don’t like a hidden reserve, but I get it and think it’s fair enough. But an AH should not be able to effectively shill up the price, making it seem that real bids are being placed, in an effort to get someone to place a real bid at the hidden reserve amount. I despise this practice. Now, just because an AH can do this does not necessarily mean they do it, although I expect they do/would if an item is below the hidden reserve- why not use the tool if you can.

I think that this practice is common with many of the major art auction houses.

Other niche auction houses, like some in our hobby, use a similar practice too.

This is from Mile High Card Company's Auction Rules on their website:

2d) ...A reserve price is the confidential minimum price that a consignor will accept before they will sell the material, this means that a bid of equal or greater than the confidential reserve must be placed for a successful bid to be accepted on that lot. MHCC may implement this reserve by bidding on behalf of the consignor and may place a bid up to the amount of the reserve, by placing successive bids if necessary. In the limited instances where MHCC has a financial interest in a lot beyond our commission, we may place a bid to protect our financial interest...

And from SCP Auctions' Terms and conditions:

Reserve bid prices are not publicly available and will not be published. SCP may implement this reserve by executing bids on behalf of the consigner and may place a bid up to the amount one increment below the reserve, by placing successive bids if necessary.

As I like to say, bidding shenanigans have been going on since the first bushel of wheat was sold in the agora, and probably before.

I get why they do it but like many here, do not agree with the practice. It’s dogshit as you stated.

If a consigner (or AH) has a minimum price set, that’s perfectly fine. Just open the auction lot at that price instead of faking additional interest (bids).

I don’t believe REA does this.

They look good
*******

16. No Consignor Bids. Consignors are prohibited from bidding on their own materials or having others secretly bid for them on their behalf. If any consignor directly or indirectly bids on his own items at auction, it is without REA's consent, and REA reserves the right, at its sole discretion, at any time and without any warning, to remove any bids it suspects of being fraudulent or placed in consort with a consignor.

17. No House Bids. There is no circumstance under which REA may execute bids for its own "house account," thereby unfairly competing with bidders. In fact, to be clear, REA does not have a "house account," unlike many other auction operators. Under no circumstance is any employee of REA authorized to place bids in this Auction on their personal accounts. Employees of REA (and REA) may consign their personal property or owned items to this Auction, provided they will be treated like any other consignor (including not being permitted to bid on their own lots).

13. Opening Bids and Reserve Amounts. Each lot in this Auction is accompanied by an opening bid (meaning a minimum bid amount). Select lots may have a confidential reserve placed on them by the consignor, which means that the lot will not be sold until a bidder bids an amount equal or greater than the reserve amount. A reserve is set by the consignor (not by REA) when the consignor determines that the value of a lot is such that they are not willing to sell the lot if its sale price does not attain the reserve amount. The reserve notification may not post to a lot until the Auction is in progress and as late in the Auction as on or about 24 hours prior to the Final Initial Bid Day’s conclusion at 9:00 PM ET that day. Check back before the Auction’s Final Initial Bid Day ending (i.e., prior to 9:00 PM ET that day) to see any applicable reserve. The absence of a reserve when the Auction commences and early in the Auction process should not be interpreted as there being no reserve applicable. Lots subject to a reserve will be clearly designated as subject to a reserve (or using similar language) on their individual pages online in accordance with the timeline posted above. REA does not update any physical (printed) Auction catalog with reserves announced after the catalog was mailed to recipients; for the most up to date information on reserves, bidders should consult the lot details online. Until such time that the confidential reserve is met, the lot page will display "Reserve Not Met" directly underneath the current bid. Bidders may continue to bid on such lots using all available bid increments.

Once the confidential reserve is met, the status of the lot will change to "Reserve Met" on the lot’s online page. Reserve amounts will not be disclosed online but may be available upon request unless the consignor has restricted disclosure. Items with a confidential reserve may be accompanied by an estimated value. The confidential reserve amount will be lower than or equal to this estimated value.

https://bid.robertedwardauctions.com/terms.pdf

Nor does LOTG

So we think most likely only one bidder against the auction house at some point. Any idea who that bidder might be and/or at what point everyone else was out?

At first, this looks like a lost opportunity from the consignor standpoint because of the high hidden reserve. But, let’s say the second bidder was out of the running at $350K. The consignor only gets that amount then. But now, they have the card back with a $850K comp (sort of), although noted that the card did not sell. A couple of years from now, they give the card to REA/Heritage/AH. Most likely, the opening bid will be much more reasonable and interested bidders researching past offerings of the card will find the not met reserve at $850K and that number will play a significant roll in how high they are willing to go. Of course, if the item description is more honest and straightforward, that will have a huge impact as well. So, potentially, this consignor might have ended up with $350K on a card whose prior highest sale was $51K, now they are working with an unsold number of $850K. This may not be a bad decision at all by the consignor, I can see the logic in possibly getting a much bigger payday down the road and Goldin played right into it by allowing the $1MM reserve.

How reserves may be used is a function of state law. Auctioneers located in states with less regulation are freer to do more hidden manipulation of an auction. You don't care for a particular auctioneer's policy, bitch to the state legislature.

All of the machinations have one goal: to generate 'action'. If the auction started at the reserve, there would be less action. The more bidders in an auction on an item, the more buzz it gets, the more likely others are to bid on the item. FOMO.

A more important factor on whether a card is getting an unfair push in an auction is who the consigner is. An auction house may not bid on their own lots creating a fake hidden reserve, yet their consigner may be employing a myriad of accounts to push up the price of a lot. We’ve all dealt with collectors who think their cards are worth 3-5x market value and treat their cards as if it was their only asset in the world. Cards like that aren’t going cheaply or even for fair market value at an auction. When I see someone pushing a card on Net 54 in the most ridiculous manner, I’m certain to stay away from bidding on it at auction. Some people just can’t bear for the market to determine true value. If they're using sock puppet accounts here to fabricate interest or doing YouTube interviews or getting hobby publications to write about their card, you can be sure they’re getting their card hit fraudulently in the auction.

Also, if the consigner is listed in the Mastro indictment or shill bidder list as a fraudster, that may shed some light too.

Point well taken. These practices are permitted because state and local legislatures permit them. NYC has gone even further off the deep end -- https://www.huntonak.com/hunton-reta...rning-auctions

I don't know if it is because of increased state and local tax revenue these legislatures feel they will generate, or the prestige of attracting AHs to their venues, or to threats by AHs to leave venues unless certain rules are enacted, or a combination of the above, but it sickens me these practices are allowed. It is nothing less than legalized shill bidding, rationalized under the pretext that as long as the AH discloses to you (in the fine print) that they are trying to defraud you, the governing jurisdiction will not treat it as fraud even when the AH pulls it off.

I'd love to see the day some defendant in a civil suit brought against him/her for fraud raises the defense that since the plaintiff knew the defendant had a reputation as a fraudster, the plaintiff was put on notice shenanigans would take place and thereby as a matter of law no fraud could have occurred.

Yikes

Hi Corey! The easy solution is that if people find these terms egregious they can choose not to bid in these auctions until the terms are changed. Voting with your feet may work better than waiting for legislative changes. Do I think this will happen on any meaningful scale—no.

You're right. People's feet are going to go where the "stuff" is, just how it is.

At the simplest level, if there's a scenario where

1. A buyer would pay up to $150,
2. The seller wants at least $100, and
3. No other potential buyer would bid above $50

... then how is the transaction that the first two parties want to take place actually going to happen? (I'm leaving out max auto-bidding and other fancy stuff, just focusing on the base concept.)

Lots of different hairs getting split in this thread, but I'm not seeing a net loss, regardless of how the reserve gets hit. The auction house is also supposed to get the most for the consigner, so if the extra motion draws a few more fish – I know, I know, or whales, which are mammals – then they're fulfilling that.

As we are learning from this thread, many people do not and will not know what is taking place. So yes, I can vote with my feet, and in fact that is what I do. But how can a person do that if he/she doesn't know what is going on? Isn't that what legislatures are supposed to do -- prohibit shady practices that the average Joe would otherwise not realize are taking place and therefore not take the proper precautions to protect themselves?

After the blatant shenanigans with the champs hats jackie card...i have a hard time even with REA. Consigned by brother. Bought by brother...or something like that to make it "legit". Both are still able to bid and consign to REA I'd imagine, despite rock solid evidence.

Nor does Andy Sandler’s All Sports Collectibles Auctions.

Race to the bottom stuff...