Sotheby’s Five-Year Stock Price Chart
So while all you CultureGrrl readers are away from your computers, catching the rays and perusing the booths, here’s a bullish market signal to contemplate:
Sotheby’s has gotten back into the guarantee business and (unlike privately traded Christie’s) has released figures that quantify this. Guarantees are the amounts that the auction house promises to certain consignors, whether or not bidding reaches the level of the guarantee. Both auction houses sharply cut back on guarantees after the bubble burst in the fall of 2008.
But as you will see, Sotheby’s laid off most if its risk by securing “irrevocable bids” from third parties on the guaranteed works.
In its most recent quarterly report filed with the SEC, Sotheby’s revealed the following:
For the nine months ended September 30, 2010, Sotheby’s reported net income of $64.7 million, an increase of $144.8 million when compared to the prior year’s ($80.1) million net loss.…
As of September 30, 2010, Sotheby’s had outstanding auction guarantees totaling $77.2 million [compared with only $5.3 million a year ago and a whopping $319.6 million on Sept. 30, 2008], with the related property having pre-sale low and high estimates of $76 million and $103.6 million, respectively.
Sotheby’s financial exposure under these auction guarantees is reduced by $73 million as a result of irrevocable bids from unaffiliated counterparties….The property related to these guarantees is being offered at auctions occurring in the fourth quarter of 2010 [including last month’s big Impressionist/modern and contemporary sales].
And here’s a bullish CultureGrrl indicator:
My warm thanks go out to CultureGrrl Donor 148 from San Francisco. Her contribution, however, will not be sufficient to defray my big purchase of this week, which I made for you, art-lings. (After all, how do you think I spend most of my computer time?):
Oh, and I also got another new blogger’s helper recently—a better camera.