The Associated Press

Forty years after it was made, the Velvet Underground's first recording has become a financial hit — in cyberspace.

Bought for 75 cents four years ago at a Manhattan flea market, the rare recording of music that ended up on the influential New York band's first album, The Velvet Underground & Nico, sold on eBay on Dec. 8 for a closing bid of $155,401 US.

But now it turns out the bid may be bogus. Seller Warren Hill, a collector from Montreal, is attempting to determine whether any of the other bids were legitimate.

The buyer, only identified by the eBay screen name "mechadaddy," reneged on the bid, Hill told the Globe and Mail.

But a greater mystery endures: How did the 12-inch acetate LP end up buried in a box of records at a flea market?

Hill bought the record in September 2002 at the flea market, according to an article written by his friend, Eric Isaacson of Mississippi Records in Portland, Ore., in the current issue of Goldmine magazine.

Isaacson helped Hill decipher the nature of the lucky find.

"We cued it up and were stunned — the first song was not Sunday Morning as on the Velvet Underground & Nico Verve LP, but rather it was European Son — the song that is last on that LP, and it was a version neither of us had ever heard before!" Isaacson wrote.

The recording turned out to be a studio acetate made during Velvet Underground's first recording session over four days in April 1966 at New York's Scepter Studios. The record reportedly is one of two in existence; the other is privately owned, with rumours circulating about the owner's identity. Columbia Records rejected the album.

"I immediately took the needle off the record, and realized that we had something special," Isaacson wrote. Hill and Isaacson photographed the album, made a digital backup copy of the music, and decided to put it up for auction.

Velvet Underground left its musical stamp on hundreds of other bands.

The band, named after a book about edgy sex practices in the 1960s, was fuelled by Moe Tucker's hard-driving drumming, John Cale's anxious viola, and lead singer Lou Reed, whose lyrics spoke of drug-induced beauty and the gritty Lower East Side.

The first album featured Nico, the European model-actress-singer in her first and last recorded appearance with the band.