Tomahawk, WI 10/08/2013 (BasicsMedia) – Sothebys (NYSE:BID) is a global name in the auctioning fine and decorative art. The company is also quite good auctioning authenticated jewelry on a global scale. Its operations are divided into auctioning, financing and dealership. Its influence is often felt in 3 markets namely, US, UK and Australia. It has been on the news quite a lot of late primarily as a result of the efforts put in place by one of its shareholders, David Loeb, who seeks to see a new CEO installed to head the business. These efforts have pushed the business into the limelight thus causing a lot of concern.

 The current CEO of BID is William F. Ruprecht. David Loeb accuses him of being out of touch and this is the main reason why he is working extra hard to have this man toppled. The current CEO has been occupying the position for close to nine years now. Initially he was renowned for his ability to fix things which were not going the way they were supposed to. Loeb comes into the equation because he is not only a billionaire, but is also the head of a hedge fund known as Third Point LLC. According to him, BID has been unable to perform on many fronts.

The biggest competition which BID has to contend with remains Christie’s. Loeb has been criticizing its digital strategy which it has employed in a bid to increase its advantages over Christie’s. Loeb also blames the current CEO of enjoying perks which can only be described as superfluous. He also claims that the CEO enjoys steep salaries which should be revised. At the moment, it is a bit difficult to tell whether the Loeb has actually succeeded in adding many supporters to his cause and whether this is a one man exercise or the work of many people.

The news is not good for BID since it appears as if the company is bound to attract a lot of negative news from various quarters. Any time a company of BID’s stature embarks on such activities where it looks as if some coup is in progress, with regard to its management structure, it may suffer. If other investors are not privy to what is going on, they might conclude that there is some battle in progress which doesn’t bode well for their investments. The period of uncertainty may also negate any gains the stock had thus far enjoyed in the market.

 Third Point LLC is the largest shareholder in Sotheby’s. Its stakes in the company currently stand at 9.3%. There are several outcomes which could arise due to Loeb’s continued persistence to have the current CEO of BID toppled and a new one appointed. He might be justified in some of his claims regarding how much this company pays its CEO compared to others which are bigger and more prominent in the market than BID. However, if this war continues for much longer, there is real chance that it could cause BID to go through a period of instability.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.