Tuesday, January 18, 2011

Paris art "stock exchange" launched

PARIS. As previously posted, A&F Markets was poised to create an art "stock exchange" (the second in the world) and ARTINFO reports the initiative has now been launched. ARTINFO states that the exchange "will treat artworks as investment vehicles" but this is technically incorrect since investors will own shares in the artworks themselves rather than in investments vehicles incorporated solely for the purpose of holding the art assets. It had been reported that the exchange would initially offer shares in six artworks. However, at least for now, shares in only two artworks are available - LeWitt's "Irregular Form" and Vezzoli's "The Premiere of a Play That Will Never Run." Interestingly, instead of offering the same number of shares in each piece at a different rate (the Vezzoli is valued at $32,000 more than the LeWitt), the exchange is offering shares in both works at €10 ($13) per share.

Sol LeWitt, "Irregular Form" (1998)
No doubt certain circles in the art world are skirming over this commoditization of art. Founder Pierre Naquin defended the venture by pointing out how floating these works will actually bring them closer to the public because "participating galleries must commit to show their stock-market works by appointment, as well as to loaning them for retrospectives or other exhibitions, since these are expected to increase the value of the shares." True... but only until a work gets bought which in practice will likely be when an investor acquires 80% of the shares and squeezes out the minority shareholder(s).

The price tags of the works are by no means at the high-end of the market ($142,000 and $174,000) and I doubt their value will increase dramatically and quickly enough to prevent a determined investor from being able to buy a work (though does the fact that Art Exchange "retains the exclusive right to sell any of the works within its system" mean they can block a sale? Surely not). I'm debating if I should buy some shares myself to experience the exchange first-hand (I'll keep my readers guessing as to whether or not I think the shares are a good investment).


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