A group of investors has taken legal action against Sotheby’s auction house, celebrities like Paris Hilton and Justin Bieber, and other entities, accusing them of misleading promotion of the Bored Ape Yacht Club NFTs and alleging that these parties colluded to artificially inflate the prices of these digital collectibles.
In the recent past, these NFTs were trading in the $350,000 to $400,000 range. However, their market value has plummeted, with some BAYC NFTs currently bubbling around $50k. The lawsuit points to a particular event in September 2021 when Sotheby’s auctioned more than 100 of these NFTs for a staggering $24 million, far exceeding the pre-sale estimate of $12 to $18 million. The plaintiffs argue that this sale was deceptive and aimed at generating unwarranted hype around the Bored Ape brand.
Sotheby’s has responded, stating that the allegations are baseless and that they are prepared to defend their position. Representatives for Paris Hilton and Justin Bieber have yet to comment. Yuga Labs, creator of the Bored Ape Yacht Club NFTs, has dismissed the allegations, emphasizing the company's role in fostering a community-driven approach to NFTs.
I can't blame the investors for trying, but I hope the investors lose – and lose huge. If they purchased the artwork (an NFT is a proof-of-ownership receipt, not the artwork) to enjoy, nothing has changed. The art is the same, and if they thought it was artistic and worthy of owning at the price they paid, they can still enjoy it. If, on the other hand, the investors purchased the BAYC artwork as an investment, believing that (at some future time) they would be able to sell the assets at a profit… caveat emptor.
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P.S. ICYMI, yesterday's Shelly Palmer LIVE covered TV's terrible, horrible, no good, very bad month; appropriate use cases for generative AI; Gary Gensler's warning that an AI-driven stock market will be a ticking time bomb; and much more. Watch it here.
ABOUT SHELLY PALMER
Shelly Palmer is the Professor of Advanced Media in Residence at Syracuse University’s S.I. Newhouse School of Public Communications and CEO of The Palmer Group, a consulting practice that helps Fortune 500 companies with technology, media and marketing. Named LinkedIn’s “Top Voice in Technology,” he covers tech and business for Good Day New York, is a regular commentator on CNN and writes a popular daily business blog. He's a bestselling author, and the creator of the popular, free online course, Generative AI for Execs. Follow @shellypalmer or visit shellypalmer.com.