Purchased In 1984 For $19,000, Basquiat Painting Sells For "Mind-Blowing" $111 Million

Tyler Durden's picture

It could be the single best unlevered investment in recent history.

A portrait by New York artist Jean-Michel Basquiat sold for a remarkable $110.5 million - nearly double the $60 million expected take - during a Sotheby’s auction Thursday night in New York, according to Bloomberg. The sale set a new record for an American artist, and has become one of now 10 paintings in the “$100 Million Club,” according to the New York Times.

The sale of the painting, “Untitled,” made for a thrilling moment at Sotheby’s postwar and contemporary auction as at least four bidders on the phones and in the room sailed past the $60 million level at which the work — forged from oil stick and spray paint — had been guaranteed to sell by a third party.

The Basquat is now among the most-expensive pieces of contemporary art ever auctioned. It set a new record for any U.S. artist at auction, besting the $105.4 million paid four years ago for Andy Warhol’s “Silver Car Crash (Double Disaster).”

“It’s a really historical moment,” said Larry Warsh, a longtime Basquiat collector. “It does cement this artist once again.”  Warsh also said that the sale was “mind-blowing" and added that “I’m not usually impressed by numbers, but this is really out of the boundaries.”

But what’s even more striking is that the painting, created in 1982, was first bought at auction in 1984 for $19,000 by the late collectors Jerry and Emily Spiegel. It's sale 33 year later for over $110 million is equivalent to a total return of over 5,815x, or a compounded annualized return of some 30%, perhaps the single best unlevered investment of the past 3+ decades, and outperforming the return of even the most legendary hedge funds over the same period.

The buyer was Japanese billionaire Yusaku Maezawa, who posted a shot of him posing with his newfound purchase on his Twitter account.

As the auction was still going on, Mr. Maezawa announced that he was the buyer, posting a photo of himself with the work on Instagram. “When I first encountered this painting, I was struck with so much excitement and gratitude for my love of art,” he said in the post. “I want to share that experience with as many people as possible.”

Last May, Mr. Maezawa snapped up $98 million worth of contemporary art at auctions

As for Basquiat, the sale shows “He’s now in the same league as Francis Bacon and Pablo Picasso,” art dealer Jeffrey Deitch told the New York Times.

“I remember astounding the art world back in 1980s when I set an auction record for Basquiat at $99,000,” said Jeffrey Deitch, an art dealer who was the artist’s friend and champion. “All of us, Jean-Michel’s friends, we totally believed in his genius. I always thought he would be one day in the legion of Picasso, Bacon and Van Gogh. The work has that iconic quality. His appeal is real.”

Last year, Basquiat became the highest-grossing American artist at auction, generating $171.5 million from 80 works, according to Artprice. The former grafitti artist, known for his gritty, surreal portraits, was one of the most lauded American artists of the 1980s up until his death in 1988 of a drug overdose at the age of 27. 

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Tiwin's picture

Jeezhus , its ugly.

Colorful, but ugly.

yomutti2's picture

 

 Apparently, my 4 year old has been cranking out $100 million dolalr artworks. Who knew?

 

A. Boaty's picture

Apparently, you don't know how to market them.

meta-trader's picture

you can add an extra 1500/USD week after week in your income just working on the internet for a couple of hours each day... check this link... http://bit.ly/2jdTzrM

A. Boaty's picture

What happened to 7k, or 80k? What, no jet? This wrecks the Spamflation Index!

Whoa Dammit's picture

"What, no jet?"

He musta found out thehard way that the cocktail waitress from the club down in North Soho was named Lola.

Manthong's picture

 

I don’t know much about art, but that sucks.

Most pre-school tots produce better work.

“one of the most lauded American artists of the 1980s up until his death in 1988 of a drug overdose at the age of 27.” 

Thank God for drugs.

Antifaschistische's picture

the consolation, is that...no wealth is created nor destroyed when some fool pays 100m for a piece of ugly.   It's just trickle down stupid.  but...we love wealth redistribution so...let it flow.

Kayman's picture

The Feds conjured up money being put to work. 

MillionDollarButter's picture

A fool and their own personal judgment are soon separated.

Jon Bong Jovi's picture

You think a guy who is worth billions needs to budget like a pleb? That's his lunch money.

waspwench's picture

This purchaser is not buying art, he is buying status.   Look how wealthy I am, I can spend all this money on something that is intrinsically worthless.   It is a game that only the wealthy can play and it serves to tell all the other wealthy people that you are a member of the club.   That said, I understand that Old Masters are undervalued right now - wish I could afford a few.

Stuck on Zero's picture

$19,000 in 1984. It was a ripoff then.

Overfed's picture

That's no kiddin'. I wouldn't display that ugly piece of shit in a cow barn.

mkhs's picture

So this is a good measure of real inflation, not fake gov stats?

prefan4200's picture

Or you can buy an ugly painting for $19,000, live in your mom's basement and smoke crack for 33 years, then sell the painting for $110 million and buy whatever the fuck you want.

Avatar Of Failure's picture

"meth-trader"? So you selling shit on darkmarkets? Am I correct?

No Time for Fishing's picture

I'm long 4 years old paintings short Basquiat Paintings

Nice Try Lao Che's picture

I think you nailed it:

 

"But what’s even more striking is that the painting, created in 1982, was first bought at auction in 1984 for $19,000 by the late collectors Jerry and Emily Spiegel"

 

Seems those joos have a nose for a good value (not to mention a printing press)

Juggernaut x2's picture

"Anyone who sees and paints a sky green and a field blue ought to be sterilized"- AH.

mkkby's picture

Next week, art fags will call someone else the artist of the 90s.  Then this piece of shit will be worth zero again, and something even dumber will be worth millions.

Rich people are even bigger suckers than poor people.

Hammer823's picture

Stock prices are just like art prices.  Pricing an abstract item.  There is no "right" or "wrong" price for this Basquiat just as there is no "right" or "wrong" price for Tesla.  It's in the eye of the beholder.  As long as someone or something is willing to pay for it.

Here is a recent brief post of mine on this very subject:

https://www.instagram.com/p/BQlunGOltw3/?taken-by=the_rigged_street_journal

The illusion is real.

Troy Ounce's picture

 

No, at the top (bankers, .govs) is where the bail oits are and where the inflation is: Vintage cars, cigars, wines, art, top appartment.....

The middle and the bottom so with us, the deplorables, there is deflation.

MisterMousePotato's picture

"There is no 'right' or 'wrong' ... ."

Hmm. Where have I heard that before?

Anyway, the best writing on the subject of modern 'art' is, imo, that of Karl Zinsmeister in a short article written for the Art Renewal Center a decade or two past:

http://archive.is/AG8n1

It reminds me of a time when I, too, thought the decline of Western Civilization was something that could be reversed.

I wonder if he would have written thus if he had had to endure decades of Kardashians, rap and hip hop, Bruce Genders, and trousers at ones' knees?

rex-lacrymarum's picture

I would like to point out that this is an integral part of economic theory since 1871, when Carl Menger finally resolved the problems of value theory by showing that all value judgments are subjective and introducing the theory of marginal utility. 

Musum's picture

Encourage her to use brighter colors.

chubbar's picture

What they fail to mention is that $19,000 in 1984 was worth 111 million in today's dollars. Go Fed!

Nice Try Lao Che's picture

How much is that in Pokemon Go bitcoin sheckels?

No Time for Fishing's picture

Wish there was a way to short that sale!

junction's picture

The high water mark for Basquiat.  A really original painting but overpriced thanks to a ring of art dealers boosting the auction price.  

Déjà view's picture

Or...

$110,981,000...'coupon clipper'...

hoist the bs flag's picture

total garbage.  this communist, "modern art" shit is worthy of the bottom of a bird cage. 

BorisTheBlade's picture

It is a post-modern art, the one which seeks to contradict certain aspects of modernity. The surest sign of decadence and erosion to assign high value to such works. It has artistic value, certainly, but me thinks it's slightly overpriced, like $100 mil overpriced.

hoist the bs flag's picture

i dont care what you call it or what it is attempting to contradict or subvert. its shit. 

MisterMousePotato's picture

Reminded me of Karl Zinsmeister's critique of modern art:

http://archive.is/AG8n1

More relevant than ever.

The nice thing about Western Civilization's decline is the (buying) opportunity it presents for people who revere the aesthetic and craftsmanship of the past.

I am a person of very, very modest means. but I live in a museum. I have furniture and objets d'art that curators of museums (real museums) want me to send them. Boxes of the stuff. Too much to display. A travesty, really.

Someday, I will die, and I, too, will become a part of their mystery.

Musum's picture

"It has artistic value, certainly"

Seriously, could you explain where the "value" here is in this "art"? What's the idea behind it?

mkhs's picture

Seriously, the value is in separating 110 mm from the mark.   They are smart enough to earn billions but too stupid to spend it wisely.

land_of_the_few's picture
Before You Buy That Rothko - How The CIA Covertly Nurtured Modern Art As A Cold War "Weapon"

http://www.zerohedge.com/news/2015-05-15/you-buy-rothko-how-cia-covertly...

landauer's picture

Is there nothing that is shit in the modern world that these people are not responsible for?

NoWayJose's picture

If I had to look at that for 33 years I would have asked for more money!

45North1's picture

Doesn't say timeless to me....

syzygysus's picture

Screams inflation to me.

roddy6667's picture

This is one of the sure signs of a market top. When artwork and collectibles sell for prices like this. Look out below!!!