The Pink Dream or Star: Most Expensive Diamond Ever un-Sold
March 1st, 2014 by Noam Flint
The rarity and remarkable beauty of pink diamonds has made them a highly sought-after addition to any gemstone investor or enthusiast’s collection. Any time one of these dazzling stones is up for auction, it’s bound to draw a lot of attention, as well as fetch a considerable amount of money per carat.
The ‘Pink Star’ / ‘Pink Dream’ – 59.6 carat Flawless Vivid Pink Diamond. (Photo Sotheby’s)
Sotheby’s, one of the top auction houses in the world, recently reported a substantial 37 percent rise in its fourth-quarter earnings, reaching $90.7 million from from $66.1 million tone year prior.
This growth can mostly be attributed to one uncommon diamond in particular: “Pink Dream.” Previously called the “Pink Star,” this 59.9-carat stone is the largest internally flawless fancy vivid pink diamond ever graded. So it’s no surprise that it garnered $83.2 million when it sold in November to diamond-cutter Isaac Wolf, setting a new record for the price paid for any diamond at auction. According to the Natural Color Diamond Association, Bloomberg has determined that the price paid for this pink stone is the third-highest amount ever shelled out in 2013 for a collectible or art piece.
The Pink Star becomes the Pink Dream becomes the Pink Nightmare
However, a new development has put a wrench in this successful sale: The buyer couldn’t pay up. In an interview that went up on YouTube, Wolf revealed that he had purchased the stone with money from other anonymous investors.
I saw a great opportunity that I don’t think anybody in the industry realized and I took advantage of it”
Considering a similar 10 carat diamond (if found) is sold for $25 Million, $2.5 Million per carat, this diamond should be worth $150 million or more (59.6 carat * $2.5 Million) and he bought it for $83 million, the investment was definitely a smart move – if only he had the funds to follow through.
“We are currently in discussions with the buyer while also considering other alternatives,” said Patrick McClymont, Sotheby’s chief financial officer, as quoted by the Natural Color Diamond Industry Association. “In the meantime, we are comfortable with our valuation and see real value in owning the diamond at this price.”
But this statement did not help Sotheby’s stock owners who felt approximately 8% decrease in value within a day (see the graph of the stock’s reaction).
David Schick, an analyst at Stifel Financial Corp., reportedly admitted that re-acquiring the Pink Dream hurt revenue, but he’s not at at all worried about it selling.
The good news for us diamond lovers in this story… is that even though this was a once in a life time auction it seems that we’ll get a chance to view it again!
But there is one more open question that no one seemed to ask – Given the fact that the honor of changing the diamond’s name to the Pink Dream was given to Mr. Wolf upon the purchase – Will the diamond’s name be changed back to the Pink Star? What do you think?