Stephanie Ruhle reports on Bloomberg the breaking news from the Third Point website of Dan Loeb who criticized the business model of the Sotheby’s. Loeb criticized the directors of Sotheby’s for being “short term investors” something Loeb himself has been accused of.
“We believe the Company’s slide is a consequence of failed leadership by a Board of Directors who collectively own a scant 0.87 % stake,” Loeb stated on his website, the Third Point.
Loeb’s long, seven-page letter is a response to a letter sent by Sotheby’s not just to Loeb but to also their shareholders. Sotheby’s letter stated that ‘Dan Loeb was unable to act constructively as a director, adding no relevant skills, experience or expertise.”
Loeb lobs it back, saying in his letter that Sotheby’s has made no sincere effort to cut costs, the money is going to the wrong place, the model they employ to attract listings so they don’t end up at Christies is all wrong. In addition, Loeb states,
“Sotheby’s current challenges are well-known consequences of poor corporate governance and malfunctioning board processes. Our view is that Sotheby’s sorely lacks innovation and creativity at its most senior levels and requires an infusion of leadership, accountability and transparency.”