Sotheby's Stock Falls Prior to Hirst Sale

Sotheby's shares fell 9% last week to their lowest level since June 2006 amid concern the global art market can absorb only so many dead animals in formaldehyde.

Sotheby's said in July that it expects to realize more than $114 million in its auctions today and tomorrow of new Damien Hirst works in London. The inventory of more than 200 lots includes a tiger shark in formaldehyde, a zebra in formaldehyde, a calf in formaldehyde, and a foal in formaldehyde.

The sale, which also features paintings and works on steel and paper, is unusual in that Mr. Hirst consigned the goods directly and will pocket the proceeds.

Sotheby's shares fell 8% on Thursday and ended Friday unchanged in New York Stock Exchange composite trading, at $23.03. They're down 40% this year and 60% from their peak in October 2007.

"It's very simple: the Damien Hirst will fail," said Asher Edelman, a New York dealer. "The view of Monday night is very skeptical."

Some heretics postulate that the top end of the art market may finally soften after a roughly decadelong run-up. It's not every week that two Standard & Poor's 500 Index companies, Fannie Mae and Freddie Mac, are placed under federal control while a third, Lehman Brothers Holdings Inc., enters into talks with potential buyers after losing three-quarters of its value in five days.

Consumers are paring spending amid higher prices for gas and food and unemployment at its highest in five years. Economists surveyed by Bloomberg News this month forecast consumer spending in the current quarter slowed to the weakest pace since 1992.

"The global market for art feels volatile," said Josh Baer, a dealer who publishes the newsletter The Baer Faxt.

Sotheby's mid-season contemporary art auction on Wednesday didn't add confidence to the market. The sale totaled $10.6 million, below the $14 million high estimate, with just 69% of lots selling. At the comparable sale a year ago, 81% of lots found buyers.

That said, the London sale is a high-profile event and may attract the status-conscious. Mr. Baer said it may do well with new buyers. Steven Cohen, the wealthy founder of SAC Capital Advisors, famously paid $8 million for Hirst's pickled tiger shark.

"There is still a lot of money out there," a senior vice president of an art appraiser and consultant firm, Gurr Johns, Kimball Higgs, said. "The wealthy of the wealthy continue to participate in the art market."