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Saturday, March 1, 2014
World’s Biggest Diamond Sale Becomes World’s Biggest Diamond Default
Sotheby’s said Thursday that the high-bidder of the 59.6-carat “Pink Star” diamond that sold for a world record price of $83.2 million has defaulted. Diamond cutter Isaac Wolf, who said he was representing unnamed investors, outbid three rivals for the gem at Sotheby’s Geneva Magnificent Jewels Sale held in November. He renamed it the “Pink Dream.” Wolf was unable to pay for the flawless fancy vivid pink diamond, according to the auction house’s annual report. It is now part of Sotheby’s inventory valued at approximately $72 million According to a report on CNBC, the auction house had to buy back the diamond for $60 million because it had guaranteed that price to the original seller of the gem, whose identity is unknown. In a conference call with investors Thursday, Patrick McClymont, Sotheby’s CEO, said the auction house is still talking with Wolf about the future of the diamond. “We are currently in discussions with the buyer while also considering other alternatives,” he said. “In the meantime, we are comfortable with our valuation and see real value in owning the diamond at this price.” Wolf in a YouTube video explaining the purchase said he was representing a group of investors and considered the diamond to be worth about $150 million, based on current prices for pink diamonds of similar quality. “It’s not that I’m buying this with the money that I have in my piggy bank,” Wolf said. “It’s basically a group of investors—financial people—that are backing me on this and they are doing this as an investment, and hopefully to make a big profit.”
The diamond is graded as Type IIa, which is rare for any pink diamond, much less one of this size and color. It is twice the size of any vivid pink diamond ever brought to auction and the largest known diamond rated vivid pink. David Bennett, chairman of Sotheby’s Jewellery Division in Europe and the Middle East and chairman of Sotheby’s Switzerland, said the diamond is one of the most important gems he has seen in his 35-year career. “It is difficult to exaggerate the rarity of vivid pink diamonds weighing only five carats,” he said prior to the auction. “So this 59.60 carat stone is simply off any scale, and passes, I believe, into the ranks of the earth’s greatest natural treasures.” The oval-cut gem was the highlight of the November auction in Geneva. It was estimated to fetch more than $60 million. The bidding opened at $48 million and lasted for about five-minutes before Wolf made the winning bid. The diamond was originally mined in South Africa in 1999 as a 132.5-carat rough by De Beers. It was cut by the Steinmetz Diamond Company over a two-year period and was formerly known as Steinmetz Pink. In 2003, it was shown publicly in Monaco and was displayed at the Smithsonian Institute as part of its “Splendor of Diamonds” exhibit, according to Wikipedia. The Pink Star was sold privately in 2007.
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I am a freelance writer and editor who covers the luxury jewelry and watch industry for several publications, including Forbes.com the Financial Times, Hong Kong-based JewelleryNetAsiaand the Italian jewelry magazine, VO+. In addition, I have my own blog covering the jewelry and watch industry, Jewelry News Network.