Some artist's works have an interesting dynamic. One such is Andy Warhol.
A great number of his works were bought by a few families in the USA. These were then used as collateral for loans that underpin empires of real estate & businesses. The value of the collateral can never be allowed to sink, and obviously - if it rises further leverage can be created.
Should a Warhol hit the market it will have a bottom price set by these investors. No matter what it will sell for £300k or £1m or whatever, depending on what category it falls into. If the families have to buy it it will enter the collateral pool, if they don't their collateral remains good, and potentially grows.
So Warhol's, at least are just disconnected from their value as anything but a token. I suspect, very strongly, that at least some of these stocks have been given similar dynamics by their ownership and control structures. That's sort of ok while it lasts, but at some point someone may drop the ball and if they do then the extent of the pretend value will become very apparent very quickly.
It's an interesting anecdote, but the floor on the stocks being talked about in this article is due to them already making tons of money. Warhols are worth a lot of money because a select group of people say they are worth a lot of money. The average person on the street probably wouldn't be willing to pay the price of an iPhone for a Warhol if they didn't know who he was. On the other hand, billions of people use Microsoft and Apple products, so it's not just due to an elite opinion that the stocks have lots of value. And it's not unreasonable to imagine a world where these companies dominate in AI and make much more money in the future.
Some artist's works have an interesting dynamic. One such is Andy Warhol.
A great number of his works were bought by a few families in the USA. These were then used as collateral for loans that underpin empires of real estate & businesses. The value of the collateral can never be allowed to sink, and obviously - if it rises further leverage can be created.
Should a Warhol hit the market it will have a bottom price set by these investors. No matter what it will sell for £300k or £1m or whatever, depending on what category it falls into. If the families have to buy it it will enter the collateral pool, if they don't their collateral remains good, and potentially grows.
So Warhol's, at least are just disconnected from their value as anything but a token. I suspect, very strongly, that at least some of these stocks have been given similar dynamics by their ownership and control structures. That's sort of ok while it lasts, but at some point someone may drop the ball and if they do then the extent of the pretend value will become very apparent very quickly.