Well, that’s awkward – someone’s got their valuation very wrong

Investors are well versed in determining the true value of companies and deals, but it seems the art world is a different beast – with what must surely be the biggest-ever valuation disparity between an expert and collectors occurring this month.

Investors are well versed in determining the true value of companies and deals, but it seems the art world is a different beast – with what must surely be the biggest-ever valuation disparity between an expert and collectors occurring this month.

The item in question was a blue-and-white Chinese vase with a spherical body and a long cylindrical neck, decorated with dragons and clouds, and measuring 54cm x 40cm.

Following a valuation expert’s assessment that it dated from the 20th century and was therefore not rare and indeed “quite ordinary”, the vase was expected to fetch no more than 2,000 euros (about $3,000) when it went under the hammer at Osenat auction house near Paris.

Collectors, meanwhile, believed it to be a very rare example of an 18th-century Tianqiuping ‘celestial sphere’ vase, with early signs of interest evident when dozens of people came to examine it during a pre-auction exhibition and hundreds expressing an interest in bidding.

With this development, the auction house decided to limit the number of bidders to 30, each of whom had to pay a 10,000 euro (about $15,000) deposit to take part – itself five times more than the initial expected price, which still shows on the item’s listing page.

Source: Osenat auction house

Of the 30 bidders, 10 were still active when the price passed the five million euros mark, with the vase ultimately selling for 7.7 million euros (almost $12 million) – almost 4,000 times its estimated value.

Including the seller’s fees, the final purchase price was 9.121 million euros (almost $14 million).

“It’s incredible,” auction house president Jean-Pierre Osenat said, adding that his highest previous sale price came in 2007 when a sword used by Napoleon at the Battle of Marengo in 1,800 fetched 4.8 million euros (about $7.3 million).

“The seller lives far away and didn’t even see the vase. She inherited it from her mother, who in turn inherited it from her mother, who was a big Paris collector in the last century.”

Most of the bidders, including the eventual buyer, were Chinese, the auction house said, adding that Chinese collectors were passionate about their history and proud to take possession of historical items from their nation’s culture.

And as for the true value of the vase?

“I have faith in the hammer, which is to say that I think the law of supply and demand determines the market price. The view of an expert can’t outweigh that of 300 people … the market has spoken,” Mr Osenat said.

The president added he now believes the vase dates from the 18th century, despite a director at the auction house stating “our expert still thinks it’s not old”.

Either way, it makes valuing companies and deals seem that much easier, doesn’t it?

Sources:

 

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