Sotheby's shares fell by 25 percent a little more than a month
ARTinvestment.RU   24 мая 2011

This stems from the modest results at auctions in Hong Kong and New York

In the period from April 5 to May 17 stock auction house Sotheby's fell by 25 percent - from 54.41 to 40.46 dollars per share. The reason for that served several failed auctions held in Hong Kong and New York.

This recession - one of the most serious in comparison to similar fluctuations in the stock spring in previous years. Since March 2009 the shares of Sotheby's in general have grown slowly but steadily from 6.47 dollar to peak over the last 3,5 years the price per share of 54.41 dollars, recorded April 5, 2011.

" The expectations were becoming more and more, and this was reflected in the share price ", - said Jason Benovits (Jason Benowitz), a portfolio manager at Roosevelt Investment Group Inc., one of the main shareholders of the auction house Sotheby's.

Particularly strong growth was observed in the market of Chinese values: in March 2011 within the framework of Asia Week in New York is one of the porcelain vases, for example, was sold for $ 18 million in Estimé 800-1200 dollars.

«However, the situation began to change at the April auction in Hong Kong, where total revenue has remained within the pre-assessment and has not exceeded the estimate, as many expected", - believes Benovits.

April Sotheby's auction in Hong Kong have brought $ 447 million, 75 percent above last year's result. However, trading of porcelain from the collection Meyintan, where the 77 lots sold only 55, brought 51.2 million dollars, which is significantly lower than the estimate 91-137 million dollars. Even if we add to this sum, the proceeds from sales posleauktsionnyh, the result in 88.4 million dollars is still not up to the lower bracket of the provisional assessment.

course of ordinary shares in Sotheby's (BID) for three months (21.02-18.05). Source: artnet.com

Some experts believe that customers confused the advance payments already up to 500 thousand dollars, which demanded an auction in exchange for the opportunity to bet on the top lots . practice of introducing advances became applicable auction houses after a series of cases of non-payment of accounts Asian clients .

first overconfidence in the insatiable Asian market has been shattered. Sotheby's stock market has reacted to these developments, the depreciation of 5 percent - to 50.96 dollars per share (April 7, 2011).

Another 20 per cent shares fell after a key May auction at Sotheby's in New York, "Impressionist and Modern Art" and "Contemporary Art". Bidding Impressionist and Modern yielded 170.5 million, slightly more bottom bracket estimate 159-230 million. A week later the evening contemporary art auction ended with a score of 128.1 million dollars (estimate 120,8-171 million). Both results were the lowest for the New York evening auction at Sotheby's in those categories over the past two years.

results of its main competitor - Christie's, by contrast, is much higher: at a similar auction of contemporary art, this auction house rescued by 301.7 million dollars. What is the cause of this difference results? As suggested by the correspondent Artinfo Judd Tully (Judd Tully), dealing in over-ambitious estimate Sotheby's, is not really the quality lots. Sotheby's constantly having to argue for the best work with rival Christie's, and therein lies one of the reasons behind the stock Sotheby's, is believed by some analysts.

relationship stock market and the art market has had its ups and downs especially when it comes to promotions Sotheby's. Back in April, financial news site TheStreet.com recommended "buy" the shares, saying a "pretty high" gross income of the company at 64 percent and increase its stake to 70 percent last year. But now this same site has corrected its forecast from "buy" to "hold».

material was prepared by Maria Onuchina, AI

Sources: bloomberg.com , artinfo.com , artnet.com , artinvestment.ru