It's possible that $1,200 includes premiums. Some auctions list their final value that way. I'm not familiar enough with this auction house in general, or Proxibid specifically, to know if that's the case.

So best case, he makes a couple bucks. Worst case, he loses money. Either way...I don't see the logic! Maybe it's a "loss leader," just driving traffic to his listings when people (me) post a link to this auction haha.