He sells Cloak for 0. Cant be resold, but still-
Grinning Man in Lower Auction House
He doesn't normally sell a cloak. My guess is that someone sold a cloak to him that was really cheap and lame and that was the result.
Unless the cloak was something noteworthy, I'm gonna say this is not a bug worth fixing since merchant shops are a pain to fix. >_>
Do me a favor and start a new thread if I'm wrong about this cloak.