Add to Bits and Pieces Floating on EBay: 1,300 Iridium Shares

First it was Pez dispensers and Beanie Babies. Then came the avalanche of dusty lamps and surplus coffee mugs. Now the latest castoff up for bid on EBay: Iridium stock.

Just as pack rats everywhere have turned to the online auctioneer to rid their lives of excess--and often worthless--junk, investors are looking to EBay to unload stock that can’t be sold on the public markets.

This week, a frustrated Iridium World Communications shareholder put up 1,300 shares of the mobile satellite phone concern, six days after Nasdaq halted trading in the stock. Opening bid: $6,500.

There’s just one problem. EBay doesn’t allow the sale of stock on its Web site.

The San Jose-based company decided to forbid online stock auctions at the beginning of the year, said Kevin Pursglove, EBay’s senior director for communications.

“We do not allow it,” Pursglove said. “There is just a set of very complicated--and often contradictory--policies and regulations in place based on whether it’s a private versus a public stock, or state regulations versus federal regulations.”

Because of the sheer volume of items listed on EBay, the company does not pre-screen items, Pursglove said. Instead, it relies on other customers to monitor the site, he said.

Securities experts are divided on whether it’s illegal to sell stock at an auction Web site. Even the National Assn. of Securities Dealers, the Washington-based organization that regulates stockbrokers, isn’t sure.

“This is new,” said NASD spokesman Scott Peterson, who expressed mild relief that EBay’s no-trade policy made the question moot.

Of course, there’s always an exception. It’s OK to sell stock on EBay if the shares are worthless.

A quick search of EBay’s auction boards retrieves hundreds of offers for canceled stock certificates from defunct companies--especially old railroads and mining companies. For some reason, buyers have determined these are “collectibles.”

In fact, about 800 lots were up for bid on Friday. Looking for 100 shares of Pan American World Airlines? Bidding starts at $1.99. Have fond memories of your first Packard motorcar? One hundred shares of the company are going for $2. And there’s a $61 offer for 11 shares in a French company that helped build the Panama Canal.

Then there’s Iridium. The Washington-based company filed for Chapter 11 bankruptcy protection last week after defaulting on more than $1.5 billion in loans. Before Nasdaq halted trading for the stock, Iridium was worth just $3.06 a share after selling for as much as $49.88 in November.

At that price, the 1,300 shares were worth just under $4,000--that’s $2,500 less than the minimum bid posted on EBay. The seller did not return an e-mail message seeking comment on the situation.

But obviously, it’s hard to sneak a bum deal past those savvy EBay shoppers. In the 24 hours that the stock was up for sale, not a single bidder emerged.