Insider Buyer - 10.99ct Pink Emerald cut sold to Leviev

Further evidence of the strength in the pink diamond market was exhibited at the Sotheby’s Geneva Magnificent Jewels and Noble Jewels Auction held on May 17.

London-based, Uzbek-born billionaire Lev Leviev purchased an 11-carat fancy intense pink diamond for approximately $10.9 million including buyer’s premium – the third highest amount ever paid for a pink diamond.

The pre-auction highlight was to be the 10.99-carat emerald-cut fancy intense pink diamond mounted in platinum. The ring sold for approximately $10.9 million including buyer’s premium, well within its estimate.

These results illustrate the unabated strength of the pink diamond market, with both stones selling for a touch under $1 million/ per-carat.

This contrasts with the Christie’s New York Magnificent Jewels sale held on April 12, where a 10.09-carat, fancy vivid purplish-pink diamond ring with a pre-sale estimate of $12-15 million failed to reach its reserve.

All three stones were of similar size and color, with the Christie’s pink of a higher intensity – fancy vivid versus fancy intense for the Sotheby’s stones. So what can be concluded from this apparent contradiction? Perhaps it is indicative of an auction market often affected by subjective factors when considering a specific stone at this price point rather than the market at large.

In recent years, pink diamonds previously selling for $500,000 - $600,000 a carat appreciated to the $1 million-a-carat mark. In the past 16 months, four pink diamonds sold for over than $1 million per carat at auction, including a 24.78-carat pink diamond sold in Geneva last November to London jewelry dealer Laurence Graff for $46 million (almost $2 million a carat). He renamed it the "Graff Pink."

The record price for a diamond sold at auction was attained in 2009 for a vivid pink five-carat diamond. It sold for $2.1 million/ per carat.

The significance of the Sotheby’s sale is not to be underestimated. In the sharemarket, when a director of a listed company buys shares in that company, it is known as ‘Insider Buying’ and is usually an excellent gauge of the strength of that particular company. After all, if a company director, with all the information he possesses about the company, is willing to buy its stock, it is surely a good sign.

Lev Leviev is not just any billionaire though. An investor in residential real estate, shopping malls, energy, fashion, telecommunications, and media; Leviev made his fortune in the diamond industry and is still heavily involved in the diamond trade. Starting in the diamond industry at age 15 as a polisher, he developed a new method of laser cutting diamonds and now owns his own mines.

If an ‘insider’ like Leviev is paying almost $1million per carat for a pink diamond, it is as strong a sign as possible that the market for fancy pink color diamonds is as strong as ever.



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