The format of the auction broke various assets into about a dozen “lots”. There was preliminary bidding on a lot-by-lot basis (I was bidding against TRU for eToys, with my own price reaching $750k), and later in the evening, there was a “multi-lot” auction when anyone could go back and bundle specific lots together and raise the price. It’s here where the TRU attorney missed the boat. He should have bundled everything except the “PoshTots” and “MyTwinn” assets, plus the lot that included all the unsold inventory, and put a price in the $3.75-$4MM range, and he’d have won. Instead they paid $7.25MM — $5.1MM for Toys.com + $2.15 for eToys, Baby Universe and ePregnancy.

This isn’t a “hindsight is 20/20″ kind of thing….At 2am, live from the attorney’s office, I voiced my disbelief at the strategy they were taking. I ultimately fault the Toys R Us management for sending an attorney to the auction alone instead of a business development person or other business-minded executive. Maybe $3MM is chump change to TRU and their private equity backers (KKR Group, Bain Capital and Vornado Realty Trust), but for an entrepreneur like me, it’s a glaring example of why the country’s in the state it’s in — bad management seems to be the rule, rather than the exception!

Just got back from spending several days in Wilmington, DE attending the bankruptcy auction for “The Parent Company”, which included the businesses of eToys, Baby Universe, and several other business units, along with a valuable domain portfolio. I was taking a stab at acquiring eToys and/or Toys.com, but some big guns were there and prices were higher than I was prepared to pay for the biggest assets.

It was an absolutely CRAZY day of ups and downs. I arrived @ 10am Wednesday and didn’t leave until nearly 2:30am — and the action involving eToys & Toys.com was *still* going on! The high bidder for eToys + Baby Universe assets — an LLC we believe to be an acquisition vehicle of Toys R Us — paid $2,150,000, and a group backed by some big domain industry guys paid $1,250,000 for the Toys.com site. I’m the “back-up” bid for eToys.com @ $750,000, but it’s highly doubtful that the other deal falls apart.

I didn’t leave empty-handed. On behalf of a friend, we acquired the following names:

- Birthdays.com, .net & .org

- Birthday.net

- Ebirthdays.com

- E-birthdays.com & .net

- Happybirthdays.com

- eParties.com

- Pinata.com

Fun to be mentioned in TechCrunch. Also see Ron Jackson’s coverage on the event in DN Journal.