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>why didn't it sell? If I had to guess it would be something to do with this part: "Solow, auction experts said, had a history of not seeking guarantees, choo

>why didn't it sell? If I had to guess it would be something to do with this part: "Solow, auction experts said, had a history of not seeking guarantees, choosing to negotiate for a portion of the buyer’s fees instead. Last night that strategy proved fateful." The vendor and the auctioneer have some private agreement, which meant the sale probably ended below an acceptable price.

geoffreymcgill 1y ago
My understanding is that the $64.25M in "bidding" wasn’t real, as it was likely done with chandelier bids. Essentially fake phantom bids placed by the auctioneer to simulate interest and push the price upward. It’s a common tactic, but many see it as deceptive, especially when it creates the illusion of genuine demand.
- torlok 1y ago
  That sounds like wash trading. How is this legal?
  - hiatus 1y ago
    A sculpture is not a security.
  - i_am_jl 1y ago
    Many jurisdictions have laws specifically allowing it, as long as it's disclosed, like in the terms provided by Doyle Auction House: The auctioneer will not specifically identify bids placed on behalf of the seller. The auctioneer may further bid on behalf of the seller, up to the amount of the reserve, by placing successive or consecutive bids for a lot or by placing bids in response to other bidders. https://www.doyle.com/terms/ https://www.doyle.com/terms/
- maxerickson 1y ago
  Many see it as blatantly deceptive and wonder how someone would argue otherwise.
  - ToddLevin 1y ago
    This is Todd Levin, who is quoted in the New York Times article above. People seem to be very confused about how public auctions legally work. Here is a short lesson, being that I worked at Sotheby's for five years in the 1990s. An auction lot has a pre-auction low estimate and a high estimate that is printed in the catalogue. This is simply a guide that the experts provide - a conservative estimate as to what the experts think the auction lot might sell for based on comps of recent public sales of similar works. When an item comes to auction, the consigner and the auction house work together privately to set a reserve price (not to be confused with the pre-auction estimate which is public). The reserve price is the price at which the lot will sell, and if it fails to achieve the reserve price, it will pass and go unsold. The reserve price can be no higher than the low estimate. Traditionally most reserves are set between 80% and 100% of the low estimate, though this is not always the case for reasons I will not go into here. The auctioneer may open the bidding at any number below the reserve, and may bid up in any increments whatsoever until they hit the reserve. Once they hit the reserve, however the lot is going to be sold, and then the auction house cannot provide any more bids. Any bids called out after an item hits its reserve, must be actual bids placed in the room, on the phone, on the internet, or left in the book by verified bidders. I hope that clarifies precisely the legalities and mechanics of how things work...
    - maxerickson 1y ago
      Addressing the legality is different than addressing whether it is deceptive. Of course people close to the process know which part of it is a game.
      - ToddLevin 1y ago
        There's nothing remotely deceptive. Everybody understands there is a publicly available printed pre-auction estimate, and everybody understands that there is a reserve existing, only known to the consigner and the auction house, which can be no higher than the low pre-auction estimate. This is all clearly laid out in the auction house's publicly available terms and conditions, which also lay out every single one of these terms (and everything else applicable), what all the different terms mean, and how the auctioneer may and/or may not operate under those specific and crystal clear rules when running the auction. Everything is completely transparent. Now - if you go to an auction, and you don't read the publicly available terms and conditions, then perhaps yes, something might seem deceptive to you – but the reality is you're an idiot for not informing yourself of the readily-available rules and easy-to-understand laws and regulations under which the auction operates. At that point, it's not on the auction house at all, it's on you – caveat emptor.
kjellsbells 1y ago
Yes, it was a so-called "enhanced hammer" deal where the commission that the seller normally pays to the auction house is inverted to flow the other way...assuming a minimum selling price has been reached. The intent is to encourage more ultra-high-end sellers to work with that auction house instead of another. The auction house still makes money from the fee that the buyer pays btw, ie the hammer price is not the price the buyer pays: they pay an extra 20% to the auction house. So what seems to have happened here is that the seller set a de facto minimum of $70M before their deal with Sothebys would take effect, and, seeing that there was no interest, pulled the sale. More details here: $70 Million Giacometti Flops at Sotheby’s, as Demand for Trophy Art Softens https://news.artnet.com/market/70-million-giacometti-flops-at-sothebys-as-demand-for-trophy-art-softens-2644144 https://news.artnet.com/market/70-million-giacometti-flops-a...
- f33d5173 1y ago
  That article makes it clear that the 64.2 million bid was a chandelier bid; there were no real bids on it.
- ToddLevin 1y ago
  Just for clarity - this was not an "enhanced hammer" deal. It was a simple fact that the consigner set their reserve at $70 million, and the consigner would not lower their reserve, even knowing the risk that the work would publicly fail at that level. An enhanced hammer deal is an entirely different situation, and it applies to third-party guarantees and/or irrevocable bids (know as IBs) – and neither apply in the specific situation...

geoffreymcgill 1y ago

My understanding is that the $64.25M in "bidding" wasn’t real, as it was likely done with chandelier bids. Essentially fake phantom bids placed by the auctioneer to simulate interest and push the price upward. It’s a common tactic, but many see it as deceptive, especially when it creates the illusion of genuine demand.

torlok 1y ago
That sounds like wash trading. How is this legal?
- hiatus 1y ago
  A sculpture is not a security.
- i_am_jl 1y ago
  Many jurisdictions have laws specifically allowing it, as long as it's disclosed, like in the terms provided by Doyle Auction House: The auctioneer will not specifically identify bids placed on behalf of the seller. The auctioneer may further bid on behalf of the seller, up to the amount of the reserve, by placing successive or consecutive bids for a lot or by placing bids in response to other bidders. https://www.doyle.com/terms/ https://www.doyle.com/terms/
maxerickson 1y ago
Many see it as blatantly deceptive and wonder how someone would argue otherwise.
- ToddLevin 1y ago
  This is Todd Levin, who is quoted in the New York Times article above. People seem to be very confused about how public auctions legally work. Here is a short lesson, being that I worked at Sotheby's for five years in the 1990s. An auction lot has a pre-auction low estimate and a high estimate that is printed in the catalogue. This is simply a guide that the experts provide - a conservative estimate as to what the experts think the auction lot might sell for based on comps of recent public sales of similar works. When an item comes to auction, the consigner and the auction house work together privately to set a reserve price (not to be confused with the pre-auction estimate which is public). The reserve price is the price at which the lot will sell, and if it fails to achieve the reserve price, it will pass and go unsold. The reserve price can be no higher than the low estimate. Traditionally most reserves are set between 80% and 100% of the low estimate, though this is not always the case for reasons I will not go into here. The auctioneer may open the bidding at any number below the reserve, and may bid up in any increments whatsoever until they hit the reserve. Once they hit the reserve, however the lot is going to be sold, and then the auction house cannot provide any more bids. Any bids called out after an item hits its reserve, must be actual bids placed in the room, on the phone, on the internet, or left in the book by verified bidders. I hope that clarifies precisely the legalities and mechanics of how things work...
  - maxerickson 1y ago
    Addressing the legality is different than addressing whether it is deceptive. Of course people close to the process know which part of it is a game.
    - ToddLevin 1y ago
      There's nothing remotely deceptive. Everybody understands there is a publicly available printed pre-auction estimate, and everybody understands that there is a reserve existing, only known to the consigner and the auction house, which can be no higher than the low pre-auction estimate. This is all clearly laid out in the auction house's publicly available terms and conditions, which also lay out every single one of these terms (and everything else applicable), what all the different terms mean, and how the auctioneer may and/or may not operate under those specific and crystal clear rules when running the auction. Everything is completely transparent. Now - if you go to an auction, and you don't read the publicly available terms and conditions, then perhaps yes, something might seem deceptive to you – but the reality is you're an idiot for not informing yourself of the readily-available rules and easy-to-understand laws and regulations under which the auction operates. At that point, it's not on the auction house at all, it's on you – caveat emptor.

kjellsbells 1y ago

Yes, it was a so-called "enhanced hammer" deal where the commission that the seller normally pays to the auction house is inverted to flow the other way...assuming a minimum selling price has been reached. The intent is to encourage more ultra-high-end sellers to work with that auction house instead of another. The auction house still makes money from the fee that the buyer pays btw, ie the hammer price is not the price the buyer pays: they pay an extra 20% to the auction house. So what seems to have happened here is that the seller set a de facto minimum of $70M before their deal with Sothebys would take effect, and, seeing that there was no interest, pulled the sale. More details here: $70 Million Giacometti Flops at Sotheby’s, as Demand for Trophy Art Softens https://news.artnet.com/market/70-million-giacometti-flops-at-sothebys-as-demand-for-trophy-art-softens-2644144 https://news.artnet.com/market/70-million-giacometti-flops-a...

f33d5173 1y ago
That article makes it clear that the 64.2 million bid was a chandelier bid; there were no real bids on it.
ToddLevin 1y ago
Just for clarity - this was not an "enhanced hammer" deal. It was a simple fact that the consigner set their reserve at $70 million, and the consigner would not lower their reserve, even knowing the risk that the work would publicly fail at that level. An enhanced hammer deal is an entirely different situation, and it applies to third-party guarantees and/or irrevocable bids (know as IBs) – and neither apply in the specific situation...