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Stocks S / Sotheby's Holdings, Inc.
|Subject: BID: Sotheby an interesting rec, but . . . ?||Date: 5/21/2008 12:59 PM|
|Author: AESpot||Number: 88 of 102|
This week’s Economist has published an article on the art market this past week (May 15th issue), titled “Signs of weakness” (in the business section. See if this link works:
A few points from this article are worth noting:
1) Even though the headline earnings of a couple of pieces have been impressive, the bidding has been spread thin. It would be interesting to see statistics on those who are doing the high-roller type of bidding, but I would suspect that, more likely than not, some of those high-rollers have oil and other natural resource wealth to help bolster their purchasing purse.
2) Approximately one third (1/3) of the pieces up for auction either met at or below their guaranteed price. Comparing this to previous years and the level of the sales’ performance has, at least temporarily, gone down. However, the article notes that they (both Sotheby’s and Christie’s) are being more reserved (no pun intended) in offering their guarantees. They are also noting with credit that it’s more difficult to have reinsurance or to spread risks properly to obtain higher margins.
3) They mention that first quarter results were somewhat flaccid due to “lower commission margins, higher expenses and fewer lucrative single-owner sale