First Rapaport Auction "Disappointing"
Martin Rapaport said his much-ballyhooed first Internet auction was "disappointing," with only 27 of 210 lots sold. (See results here.)
Still it attracted 194 bidders from 18 countries. In an interesting switch, Rapaport limited the auction only to trade buyers, not consumers, as he originally proposed.
Rapaport, who is running the auctions to develop an "index" for a proposed futures contract, told me the problem was buyers didn’t know the reserve prices, and since the goods were of high-quality, he thinks people got "sticker shock." He will likely publicize the reserve prices in his second go-round, which will happen next month. (Question: If you are making the reserve prices public, why have them? Can’t you just have starting bids?)
As for the "index," he said, "The first thing to happen is launching a viable market." Obviously, with such a limited sample, things have a ways to go before he gets enough data for a real index. He says a real diamond futures contract is still two years away.
