Wednesday, May 13, 2009

Jewelry Biz - Blue Brilliance and Bogus Bidz

GENEVA (Reuters) – A flawless vivid blue diamond weighing 7.03 carats sold Tuesday for a record 10.5 million Swiss francs ($9.49 million), the highest price paid per carat for any gemstone at auction, Sotheby's said.
The rectangular-shaped blue stone, the rarest to enter the international market this year, went to an anonymous buyer bidding by telephone after hectic bidding see-sawed between two callers for 15 minutes.

"It is fantastic in this market and shows that these rare things are very much in demand," he said.
The final price includes a commission paid by the buyer to the auction house. The stone sets a record price per carat for any gemstone sold at auction of $1,349,752, Sotheby's said.
"In this general economic environment to see $35 million worth sold in a session shows a lot about the resilience of fine jewels no matter what the climate," Bennett said.
Fresh stones to the market, including coloured diamonds, fetched good prices, the Briton said.
Well that is was Briton said...but the word on the street is that if the market was truly strong that stone would have never been sold at auction, it would have sold privately.
and on the topic of diamonds
The New York Times has this article
Ah, those crafty Russian diamond dealers....creating a false scarcity to keep prices up.
And all this time I thought that only DeBeers did that!

and....let's not forget this
from JCK
Shareholder Class Action Filed Against
A class action suit has been filed against, on behalf of purchasers of its common stock, charging it and its chief executive with violations of the Securities Exchange Act of 1934, a statement from the plaintiff's law firm said.
The complaint alleges that during the class period, defendants issued a series of false and misleading statements intended to project the picture of a financially sound and well-operating company, when, in fact, the company was operating with material deficiencies and undisclosed substantial problems that went to the heart of its business model.

manipulation of financial statements by management
imagine that.... has had a reputation for faking aution results
On November 26, 2007, a Citron Research article identified numerous alleged "red flags" and revealed previously undisclosed material problems with the company, the statement said. Two days later Citron issued a second article that provided additional details, revealing, among other things, that the company allegedly engaged improper business tactics in order to artificially raise the auction price of its products, the statement said. On this news, the Company's stock price dropped from a closing price of $19.94 on Friday, November 23, 2007, to a low of $10.10 on November 28, a loss of nearly 50%.
and more bad news for Bidz
Auction jewelry site announced substantial decreases in both its sales and profits for the first quarter of 2009.
The company’s net income in the three months ended March 31, 2009 was $1.5 million, a decrease of 67.1%.
In addition, sales decreased 49.7% to $31.2 million in the period, from $61.9 million the year before.

I've always thought that there was something unsavory about Bidz...let's just say that Amazon they are not.
but they've responded as expected
Bidz Calls Lawsuit "Without Merit"
The statement concludes that believes the plaintiffs' claims are entirely without merit and intends to defend the action vigorously.
OK...if you say so...I'm still not buying from
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