Sotheby's takes back huge diamond after default
- Associated Press
- February 28, 2014 - 3:50 PM
NEW YORK — Sotheby's says an enormous diamond known as "The Pink Star" is back in its possession after the buyer couldn't pay for the jewel and defaulted.
New York-based diamond cutter Isaac Wolf set auction history in November when he agreed to pay more than $83 million for the diamond, outbidding three others.
Sotheby's said the price fetched in Geneva for the 59.60-carat pink diamond was the highest ever paid for a gemstone at auction. It described the internally flawless pink diamond as "one of the most remarkable gems ever to appear at auction."
But the company's chief financial officer, Patrick McClymont, told investors in a conference call Thursday that the buyer had defaulted and Sotheby's has added the diamond back to its inventory at a value of $72 million.
Sotheby's said it is currently in talks with the buyer, while considering other alternatives.
"In the meantime, we are quite comfortable with our valuation and see real value in owning the diamond at this price," McClymont said.
Efforts to locate Wolf for comment were unsuccessful. He had renamed the diamond "The Pink Dream" after the auction.
The auction house, which is engaged in a proxy battle with hedge fund Third Point LLC over the composition of its board, reported Thursday that its fourth-quarter net income jumped 37 percent on improved auction sales. Revenue for the period increased nearly 17 percent to $339.2 million, falling shy of market forecasts of $358.1 million, according to FactSet.
Shares of New York-based Sotheby's fell $3.36, or 6.7 percent, to close at $47.01 Friday.
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