Auction Action by Altan Insights: Geneva Watch Auctions

Note: We are updating our earlier post to reflect additional lot closings from the Important Watches auction sessions by Sotheby's, in addition to the previously covered results from Phillips.

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This week on Auction Action, the Altan Insights team virtually visits the Geneva Watch Auction from Phillips, as well as Important Watches Part I and II from Sotheby's, where several items were offered that are comparable to existing assets offered on Rally. While each watch is somewhat idiosyncratic, and comparisons may not always be perfectly like-for-like, these results may better inform secondary market activity.

Sale prices were denominated in CHF, but we will present the converted USD value at a rate of 1.11 CHF/USD.

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Audemars Piguet Royal Oak A Series Ref. 5402ST

Offered by Rally in December of 2019 at an initial market cap of $75,000, the Audemars Piguet Royal Oak A-Series has since traded down to $40,650 (or $40.65/share) as of the close of trading May 10th. A highly sought-after and highly influential piece since its launch at Basel Fair in 1972, the Royal Oak was designed in short order by renowned and iconic watch designer, Gerald Genta. Despite a lower degree of confidence in the appeal of a steel sports watch at a luxury price point, the company made a 1,000 piece bet on the Royal Oak Series A, subsequently producing an additional 1,000 pieces when the first run eventually sold out, before moving on to Series B. Each of the 2,000 Series A pieces is numbered on the case back.

The example consigned with Phillips sold for CHF 69,300 or $76,943, representing an 89% premium to the current value of Rally’s piece. The result handily exceeded the estimate of 30,000 - 50,000 CHF.

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2018 Rolex GMT Master II “Pepsi Jubilee”

Rally offered the Pepsi GMT in November of 2019 at an initial market cap of $17,800. Since then, the asset has traded up to $20,500 (or $10.25/share) as of the most recent close on March 23rd. Despite declining just over 28% that day, the watch remains up 15.17% since launch. The 2018 Pepsi, not to be confused with the white-gold 2014 version, represented the end of a hiatus on steel Pepsi GMTs, and also re-introduced the Jubilee Bracelet; notably, the original GMT was the only Rolex sports watch offered with a Jubilee.

Phillips sold their Pepsi GMT this weekend for CHF22,680, or $25,181 in dollar terms, a 23% premium to the trading value of the watch on Rally, and handily above the estimate range of CHF 8,000 - 12,000. Sotheby's also had a Pepsi on offer this week, which closed at CHF20,160 ($22,378), exceeding the estimate range of 13,000 - 18,000 CHF. It was noted in the condition report that the Sotheby's example did show signs of light wear, while Rally's watch is unworn and in mint condition.

As for that more expensive, white-gold version from 2014? One of those sold with Phillips for CHF40,320, or just shy of $45k USD.

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Rolex Submariner “Smurf”

Also offered by Rally in November of 2019 was the Rolex Submariner “Smurf” at an initial offering market cap of $34,500. The watch has since traded up nearly 45% to $50,000 ($25/share) on the secondary market, closing unchanged most recently on April 8th. Upon its unveiling in 2008, the Smurf was the most expensive, contemporary Rolex model, owing to its 18-karat white gold construction. The watch, of course, boasts an unmistakable blue dial and bezel.

The example on offer with Phillips sold for CHF40,320, or $44,767, 10.5% lower than the current trading value of Rally’s example, and above the estimate of CHF 20,000 -30,000.

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Rolex 5100 Beta 21 "The Texan"

Initially offered by Rally back in November of 2019, the 5100 was the first Rolex model to feature a Quartz movement. As demand for superior accuracy took center stage in timekeeping in the 1970s, the industry was forced to confront the reality that automatic, mechanical watches might become relics of a bygone era. Notably, the 5100 was Rolex's most expensive piece at launch, and also debuted a quickset date function and sapphire crystal for the brand. Only 1,000 units of the Beta 21 were produced, the majority of which were yellow gold, with greater rarity in the white gold model. Rally's example launched at an initial market cap of $20,000 and has since traded up 50% to $30,000 ($30/share), most recently closing unchanged on April 8th.

The example from Sotheby's, which does appear to be in lesser condition than the Rally Texan, sold for CHF15,120, or $16,783, right in the center of the CHF 12.000 - 18,000 estimate range, and obviously a significant discount to the trading value of Rally's asset.

One of those rarer, white gold models sold for CHF37,800, or just shy of $42k.

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Rolex Day-Date “Stella”

In October of 2020, Rally offered a 1979 Rolex Coral “Stella” Dial; Day-Date at an initial offering market cap of $69,000. The watch has since traded down to $37,950 ($2.75/share) as of the most recent close on April 15th, declining by 8.33% that day and 45% since launch. Rolex began producing Day-Date models with enamel painted dials in various colors in the 1970s, focusing on the Middle East and Asian markets. They launched to muted popularity, and some even allege that Rolex destroyed batches of slow-moving or unsellable Stellas, contributing to their rarity today.

While in no way a perfect comp for the Coral “Stella”, the Phillips auction did see the sale of a burgundy “Stella”, made specifically for the Sultanate of Oman (pictured below). Given the scarcity of Stellas and the dearth of comparable sales in the same dial color, we would be remiss not to at least make mention of this sale, which concluded at CHF52,920, or just under $59k.

Sotheby's sold an additional two Stella pieces. The first, with a green dial, sold for CHF37,500 (approx $41.6k), towards the lower end of its CHF30,000 - 50,000 range. The second, a white-gold variant with a red dial featuring diamond indices like the Rally example, though in vastly lesser condition, failed to garner a bid at CHF28,000.

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To date on Rally, there have been 10 watch offerings that have started trading, with an average ROI of 5.4%, though there is a high degree of variance among those returns, from -45.8% (Audemars Piguet Royal Oak) to 50% (Rolex 5100 Beta 21 “The Texan”).

Keep it locked to Altan Insights – we’ll let you know what time it is.

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Disclaimer: You understand that by reading Altan Insights, you are not receiving financial advice. No content published here constitutes a recommendation that any particular security, transaction, or investment strategy is suitable for any specific person. You further understand that the author(s) are not advising you personally concerning the nature, potential, value or suitability of any particular security, transaction, or investment strategy. You alone are solely responsible for determining whether an investment, security or strategy, or any other product or service, is appropriate or suitable for you based on your investment objectives and personal financial situation. Please speak with a financial advisor to understand if the risks inherent in trading are appropriate for you. Trade at your own risk.

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