Formula is using the item's basue value, not it's current value.
The formula is broken, because upgrade amount is not considered in the price.
100 overall stat, 1/1
70 overall stat, 1/50 upgrade
A item sells for more.You still have to invest many millions of mana into B to just make it same stats with A, and invest future many milliones tto make it better. In fact, now many players avoid investing until get perfect item because it's too expensive to waste such tons of mana into junk.