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Sotheby's Message Board

  • krgueldner krgueldner Oct 27, 2008 4:15 PM Flag

    what would a flood of supply do to BID?

    What happens when the former investment banker can't pay his bills? Does he sell his art for whatever he can get?

    There are a lot of formerly rich people and their ranks are growing. When the cash runs out, there could be a flood of new supply in the art market. Selling prices might not be great, but it's still a commission to BID, right?

    Look, I'm not saying that the next few years are going to be great for BID, but there's more to this than fat commissions in a soaring art market.

    Comments please.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • The auction houses that I go to in NJ are seeing their profits plummet, just in the last month. The potential buyers and dealers are not bidding and many items go unsold, or are sold at 10 or 20 cents on the dollar. It's a good time to be a buyer, if you have the money, but a bad time to sell or be an auction house. This is a cyclical business and the current downturn will reverse in time. How long that will take is anyone's guess.

      • 2 Replies to scroogemcduck62
      • what are you talking about, 10-20 cents on the dollar.
        I'd like to see some examples. All markets are weak, but from what I see, the only discounting is the froth from the past 2 years. Let's put it this way, virtually anything that was bought more than several years ago, will see some appreciation. As for wine, I can tell you firsthand, there has been very little depreciation.
        I think what we're witnessing is the bifurcation at the top end, those that have money, are still very liquid and will be in force. (just my two cents.)

        lastly, how thrilled would you be to have put say $10MM in some high end art back in the 2000-2004 period, and be able to sell it at a sizable gain since then? You certainly couldn't do that with equities or real estate.

      • What kind of stuff is selling at 10 to 20 cents on the dollar? I love art, but I can't afford the big name, big dollar stuff. Not even close.

        For the art speculators, people who buy things they don't really love because they think they can make a few bucks on the appreciation, this market is a disaster. But for the art lovers out there, this could be the opportunity of a lifetime to acquire things that were previously out of reach.

    • Good deal for Sotheby's unless they had to guarantee seller price that is! There are always peeple that will buy if the price is right!

    • Bid needs to get into the lending business....

    • As someone stated a few days ago. BID will be buying up the rich mans items for pennys on the dollar and just hold the stuff until the economy is right again.
      Everything goes in cycles even though this down cycle is much worse due to our crooked financial institution.
      One things are good again BID will make a killing selling all their low cost bought items.
      This is my view at least.

    • I think a flood of supply is not a bad thing for the auction houses. You are right about depressing the prices but more volume means more commissions even at prices 50% less. BID needs to set realistic expectations for their announced estimates so they can meet them. They have failed to do so for many of their October sales and have fallen below their low estimates in some auctions.

      I think Sotheby's remains a wonderful name, has a great international network and needs to just wait it out for a couple of years. I think patient shareholders will be rewarded. The market cap is so low I am suprised EBAY does not snap them up. I plan to hold for the long term although watching their price erode 5% a day is not comforting.

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