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If Only I Could Use eBay to Short Sell Coins…

Caught this article yesterday on the new 2009 Lincoln pennies:

2009 Lincoln Penny Mania

A quick review of recently completed eBay auctions shows unmarked rolls selling for $30 to $50 each. Single pennies have sold for $2 to $4 each. Rolls with a Lincoln postage stamp and cancellation from the first day of issue at Hogdenville, Kentucky have sold for over $200. Most astoundingly, a single 2009-P Lincoln Cent graded NGC MS66RD and attributed “First Day of Issue” has sold for $400.

View the current eBay auctions.

It’s truly bizzare.  $0.50 rolls of the new Lincoln pennies are going for $30-$50 on eBay.  That’s insane.  We’re talking about a coin that will be minted in the hundreds of millions, if not billions, this year.

What I would love to do is to “short” these rolls – effectively presell them at this price, collect money now, and then send the rolls in a few months when you’ll be able to source them at less than $1/roll.

Unfortunately, that violates eBay policy. It’s for good reason, since short selling actual inventory is hard to distinguish from a scam transaction.  After all, how do you know the seller will make good on the future delivery?  What is the recourse for the buyer?

The lack of short selling, however, means that temporary supply/demand imbalances like this lead to effective price gouging for buyers who assume the eBay price is “fair”.  It’s certainly fair for the moment, but the expected ROI on this purchase for the collector is likely to be disasterous.

Still, I wouldn’t mind the ability to short sell a few hundred rolls.  If you have access to a bank that actually has these rolls, you’d be a fool not to put them up on eBay quickly, before the prices settle down.  Do I have any readers in Kentucky?  If so, can you pick me up a box?

3 Comments Post a comment
  1. Highest selling rolls were with Hodgenville, KY post office (postmark) stamp–although the postage stamp itself was a nice touch–and a “passport” stamp from the Lincoln Birthplace national historic site in the same place.

    Rumor has it that the rolls were also available at the US Mint store in DC and the one in Phila (which is said to have sold out). The big bucks from eBay sales went to those who were creative/enterprising enough to get the PO postmark and passport stamps in Kentucky, where Lincoln was born. I thought about going to Springfiled for the FDC (stamp) ceremony. I sure wish I’d thought of KY!!!

    February 26, 2009
  2. That kind of mark-up could have easily purchased round-tip airfare. Might be good for the next big event. Washington’s 300th is in 2032, and we should be out of the Depression by then.

    March 6, 2009
  3. That really is insane. I know I will be stopping over at our local bank tomorrow to see if they have any rolls they would be willing to part with. I love selling stocks short. Its too bad that violates eBay’s policy because it would be way too much fun shipping out those orders. I almost want to email the bidders and warn them… but buyer beware I guess.

    March 15, 2009

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