As Sotheby’s prepared to hold the second part of its contemporary art evening sales tonight, the company’s stock took a tumble and was downgraded from “buy” to “accumulate”
As Sotheby’s prepared to hold the second part of its contemporary art evening sales tonight, the company’s stock took a tumble and was downgraded from “buy” to “accumulate”. More than 2.6m Sotheby’s shares were traded today, following the quarterly report to shareholders in which the company announced that, while total revenue increased by 17% in the first quarter thanks to sales of high-end works, its operating costs—which were trimmed drastically during the downturn—rose 16%. This impacted the share price, which fell 6.1% today to close at $43.71. “It amounts to what we believe are growing pains for this part of the up-cycle which began a year ago,” said Wall Street analyst George Sutton of Craig-Hallum Capital Group.
Despite the packed salesroom, the atmosphere on the floor this evening lacked energy as the auction house fell short of its low estimate, with total sales at $120m (Total with commission included, $128m, est $120.8m-$171.4m). The 58-lot sale was 84.5% sold by lot and 88.7% by value.
Major works failed to fly, including the catalogue’s cover lot, Jeff Koons’ porcelain sculpture Pink Panther, 1988. The work was covered by an irrevocable bid and was expected to sell for $20m-$30m. After lacklustre bidding, it hammered at $15m. The hefty expectations, however, detracted from the fact that the $16.9m total (when the buyer’s premium is added) is, nonetheless, a big increase on the previous record for a work from the series—$1.8m at Christie’s in 1999—and ranks as Koons’ third most expensive sale at auction. “I think it’s beautiful, but it’s not my style,” said fashion designer Valentino.
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