eBay bans $6500 Iridium share auction
Way too risky to allow to continue, quakes online auctioneer
Online auction house eBay finally decided where it stands on the auctioning of shares -- it doesn't like the idea. This weekend it pulled the plug on a member's attempt to offer a raft of shares in troubled satellite cellphone company Iridium to the highest bidder. As first reported on The Register on Friday, the Iridium shareholder, based in Phoenix, Arizona, last week offered 1300 shares in the company for a minimum bid of $6500. That valued the shares at $5 each -- a 164 per cent mark-up on the stock's closing price the previous Friday when trading in Iridium shares was suspended by Nasdaq in response to the cellphone company's move into Chapter 11 bankruptcy protection. The shareholder was believed to be responding to the suggestion that an unknown trader made on a Yahoo! Finance bulletin board: if you can't trade through Nasdaq, why not try eBay? At the time, eBay said it would allow such sales provided they were legal. However, the US Securities and Exchange Commission was unable to say whether the auction would count as a private, legal transaction or a public, illegal one. Since then, eBay has decided that the legality of the sale is too open to question to risk, and so terminated the Iridium share auction. "Because of the complexity, we just decided we would not allow the sale of stock on our site," an eBay spokesman told the Reuters newsagency. That's sufficiently a generic statement to apply to other stocks, not just Iridium's, whether those stocks are currently trading on the markets or not. The spokesman also said the ruling against the sale of shares on eBay had been in force for some months, which, if true, suggests eBay really needs to pay a lot more attention to what its members are offering. ® Related Stories Iridium asks shareholders to cut stakes by 40 per cent Iridium defaults on debt Iridium crisis nears
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