A rare Velvet Underground recording owned by a Montreal music collector has failed to sell, after the winning bid in a highly anticipated auction turned out to be false.

The final bid of $155,406 US was entered Friday night in the eBay auction by a buyer known only by the moniker "mechadaddy."

Reuters and Associated Press wire services and other media outlets, including CBC Arts Online, reported the sale, which had been hosted by Saturn Records. Montrealer Warren Hill had enlisted Saturn to help him sell the archival musical artifact.

However, the bid turned out to be a fake.

"It seems to have gone badly at the end," Hill told CBC Arts Online Monday afternoon.

Though he said the failed auction was "not tearing [him] apart," Hill added, "I just don't really feel like talking about it."

Even last week, when prices for the auction were rapidly rising, Hill had been cautious.

"Things have kind of fallen through before so I'm not gonna get too excited about it yet," the record store owner told CBC News days before the auction.

"I just want to wait until things actually happen before I get too excited."

Found acetate at street sale

Warren discovered the acetate — a temporary, in-studio medium musicians and producers often used to record the day's work to take home for immediate review — while poking around a New York street sale in 2002. He purchased the recording for 75-cents.

He then waited until he visited his friend and fellow music collector, Erik Isaacson, in Portland before playing the delicate recording.

The two immediately realized that "it was nothing we'd ever heard before" by the influential band," Isaacson said.

The pair eventually discovered that the recording was essentially the first "draft" of Velvet Underground & Nico, an early version of the album that the band's mentor, Andy Warhol, had shopped around.

"I'm still interested in selling the acetate," Hill said Monday, though he did not go into detail about his next move.