Sotheby’s Forced to Buy Record-Setting 59.6-Carat ‘Pink Star’ for $60M After Winning Bidder Backs Out
March 5th, 2014
Back in November, the “Pink Star” — a 59.6-carat internally flawless pink diamond — set an auction record for the highest price ever paid for a diamond when it fetched an astonishing $83 million at Sotheby’s Geneva. But, not so fast.
Now, we’ve learned that the winning bidder of what is believed to be the largest fancy vivid pink diamond in the world was not able to come up with the funds. Sotheby’s not only lost its hefty commission, but because the auction house guaranteed the sale, it was obligated to buy the stone for a pre-sale agreed-to price of $60 million, according to MSNBC.
Internet viewers had watched in awe as the historic auction played out in real time. During a five-minute bidding frenzy among three interested buyers, the offering price quickly moved from 54 million francs to 76.325 million francs ($83.188 million). The winning bidder was New York diamond cutter Isaac Wolf, who had purchased the diamond on behalf of a group of investors. After the auction, Wolf renamed the diamond the “Pink Dream.”
But, the “Pink Star” got its old name back after the “Pink Dream” turned into a nightmare for Sotheby’s and Wolf.
One might believe that when a sale fails, the item simply goes back to the original owner. But, according to MSNBC, major auction houses often have to guarantee a sale in order to represent the most desirable items, whether they are rare diamonds or fine works of art.
Sotheby’s has added the “Pink Star” to its inventory and placed its value of $72 million. "We are currently in discussions with the buyer, while also considering other alternatives," Sotheby’s CFO Patrick McClymont said on the call with analysts. "In the meantime, we are quite comfortable with our valuation, and see real value in owning the diamond at this price.
The hype leading up to the November Sotheby’s auction was unprecedented. The oval-cut "Pink Star" highlighted a five-city promotional tour and Sotheby’s officials said the diamond was “off the scale” in terms of its size, clarity, richness of color and value.
Now that the "Pink Star" has to relinquish its record for the highest price ever paid at auction for a diamond, the record reverts to the “Graff Pink,” a 24.78 carat fancy intense pink diamond, which was sold for $45.75 million by Sotheby’s in 2010.