Do you believe the value of the BlockShares network will exceed 12.5% of the market capitalization of NuShares? If yes, Nu is protecting the interests of its stakeholders by pursuing development of B&C Exchange through this auction. This also ignores any indirect benefits to the Nu network that would occur from having access to cheaper liquidity.
If you don’t believe the value of the BlockShares network will exceed 12.5% of the market capitalization of NuShares, we would be interested to hear what parts of the technical design you feel won’t allow B&C to compete effectively. In that case I think you would be correct that shareholder interests are not being protected.
As a side note, when shareholders originally purchased NuShares at 0.0018 USD they were told that 1,000,000,000 NSR would exist. Even if this auction is successful, only slightly more than 900,000,000 will have been distributed. I don’t see how the first wave of shareholders are harmed in any scenario other than the BlockShares network being worth less than 12.5% of NuShares.
EDIT: It is worth pointing out too that your example refers to a company that is not yet publicly traded. NuShares are widely available on public exchanges, and it would be very ineffective to auction NSR above market prices.