• 02 Oct 2013 at 3:28 PM

Dan Loeb Pens His Dan Loeb-iest Letter Yet

As many of you well know, hedge fund manager Dan Loeb is famous for telling people how he really feels, occasionally via Bloomberg header but most often by good old-fashioned letter. Typically, the people on the receiving end of Loeb’s thoughts comprise the management of the companies his firm Third Point has amassed a stake in, and is attempting to oust. Over the years, CEOs and board members from Yahoo! to Sony to Nabi Biopharmaceuticals have received their own personalized missives, all of which have been classic Loeb: that potent, poetic blend of sarcasm, self-regard, belittling attacks on competence and a lengthy list of prescriptions for change. Yesterday, he added a new piece to the canon.

Let’s rewind for a moment.

A few months back, Loeb bought some shares in a company that he knows very well, auction house Sotheby’s, where he sold a large egg not too long ago. Given his long relationship with the company, Loeb thought he’d let that little bombshell sink in for a while, in hopes that the ignorami running Sotheby’s into the ground would come to their senses. Sadly, Team Sotheby’s, led by Chairman and CEO William Ruprecht, did not, and that left Loeb with no choice but to pick up his pen and get down to business. The result is a contemporary masterpiece.

It includes:

A masterful use of scare quotes that elegantly convey the underlying message that something is amiss.

“Sotheby’s current ‘strategy’ is puzzling. The Company has stated that it intends to focus on ‘top clients’ and high value lots, and shun the lower value lots that your top competitor has effectively captured by leveraging new technologies. Despite this ‘focus’, Sotheby’s market share relative to Christie’s in items over $1 million actually trails its overall market share.”

A ratcheting up of scorn but with a skilled, ever-steady hand.

“In the course of our investigation into the Company’s business practices, we came across numerous anecdotes of waste. Typical of the egregious examples was a story we heard of a recent offsite meeting consisting of an extravagant lunch and dinner at a famous ‘farm-to-table’ New York area restaurant where Sotheby’s senior management feasted on organic delicacies and imbibed vintage wines at a cost to shareholders of multiple hundreds of thousands of dollars. We acknowledge that Sotheby’s is a luxury brand, but there appears to be some confusion – this does not entitle senior management to live a life of luxury at the expense of shareholders.”

The pièce de résistance, where Loeb calls Ruprecht a pretty good CEO, and then says, fuck you anyway, get out.

“We acknowledge that you, Mr. Ruprecht, were an able steward for the Company following both the price fixing scandal in 2000 and the financial crisis in 2008. Unfortunately, you have not led the business forward in today’s art market. It is apparent to us from our meeting that you do not fully grasp the central importance of Contemporary and Modern art to the Company’s growth strategy, which is highly problematic since these are the categories expanding most rapidly among new collectors. This is not to say that Sotheby’s entire portfolio of art, antique, and collectible departments is not critically important – it is. However, Sotheby’s success will be defined in large part by its ability to generate sales and profits in Contemporary and Modern art, as this is where the greatest growth potential lies.”

Highlights From Dan Loeb’s Letter to Sotheby’s [MoneyBeat]
Investor Launches Attack on Sotheby’s [WSJ]

40 comments (hidden to protect delicate sensibilities)
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Comments (40)

  1. Posted by B Ackman | October 2, 2013 at 3:44 PM

    What a dick.

  2. Posted by Jerry | October 2, 2013 at 3:45 PM

    I love Loeb.

  3. Posted by segoviacobain | October 2, 2013 at 3:46 PM

    Looks like old Dan did not bag any Soethby's interns this year. Shame.

  4. Posted by guest | October 2, 2013 at 3:52 PM

    I love lamp.

  5. Posted by Guest | October 2, 2013 at 3:58 PM

    As a nice fuck you, Mr Ruprecht should commission an entire portfolio of Dan Loeb portraits from Geoffrey Raymond, then hold an auction to disprove Dan Loeb's claim that he is not significantly focusing on the Contemporary and Modern art scene.

  6. Posted by MFIN Grad | October 2, 2013 at 3:59 PM

    i like third point people, but c'mon Dan, corporate america is already boring as hell. Don't fuck up some of the "perks." Next thing you know, we won't have any yellow tail at the co xmas party.

  7. Posted by I wish | October 2, 2013 at 4:02 PM

    Some guys dicks still grow after puberity.

  8. Posted by guest | October 2, 2013 at 4:12 PM

    If your company truly does hire Asian women for "show" at the xmas party, please let me know where I should submit my cv for consideration.

    -Guy who isn't looking for a new gig but for the right "perks" could be swayed

  9. Posted by guest | October 2, 2013 at 4:15 PM

    Don't like a company? Then sell your shares you pumpkin pie haircutted freak!

    -Captain Obvious

  10. Posted by Guest | October 2, 2013 at 4:22 PM

    We can do a great folksy-to-table catering menu for corporations on a budget.

    -Warren & Charlie

  11. Posted by Shooter McGavin | October 2, 2013 at 4:45 PM

    "You're fucking out, I'm fucking in"

    – Danny Powers

  12. Posted by Ruprecht | October 2, 2013 at 4:52 PM

    Some must shrink and must compensate in other ways.

  13. Posted by General Tso | October 2, 2013 at 4:53 PM

    Us too.

  14. Posted by guest | October 2, 2013 at 4:56 PM

    i've had some pretty nice meals on the company/client dime, but "multiple hundreds of thousands of dollars" for a single lunch and single dinner? BS.

  15. Posted by St. Copious | October 2, 2013 at 5:00 PM

    Loeb you wrote and angry letter to someone named Ruprecht and *didn't* call him a dirty rotten scoundrel, or least include a subtle reference somewhere? How many opportunities like that do you get??

    Disclosure: I didn't read the full letter.

  16. Posted by Guest | October 2, 2013 at 8:37 PM

    That's Kenny fucking Powers*.

    Stevie Janowski

  17. Posted by Dumbass Oil Trader | October 2, 2013 at 10:39 PM


  18. Posted by S. Martin | October 2, 2013 at 10:41 PM

    "Ruprecht the Monkey Boy" to be exact.

  19. Posted by Miley Cyrus Loeb | October 2, 2013 at 11:10 PM

    Look at me everybody! I'm Daniel Fucking Relevant! No Really!!!!!!!!!!!!!!!!!

  20. Posted by VonSloneker | October 3, 2013 at 10:17 AM

    Ruprecht, do you want me to get the genital cuff?

    – Chips O'Toole

  21. Posted by King Burger | October 3, 2013 at 2:54 PM

    Us three.

    -BK, World's Finest Purveyor of Horse Meat

  22. Posted by Judging by the Pic | October 3, 2013 at 3:10 PM

    Wait… Josh Duhamel runs Third Point?

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