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Auction Action by Altan Insights: March 13, 2021

Auction Action by Altan Insights: March 13, 2021
March 13, 2021
Bradley Calleja

This week on Auction Action, Altan virtually traveled to Heritage Auctions to track their Fine and Rare Wine Signature Auction. The auction featured over 800 lots and closed March 12th.

The United States is often an afterthought when discussing the finest wines and spirits. While the vineyards of Italy and France have historically led the sector, American wines continue to develop as both a favorite among recognized sommeliers and a staple in wine investment portfolios. Screaming Eagle Cabernet Sauvignon 2016 was the first US-produced wine fractionalized on Rally. The IPO launched on September 4, 2020, with a market cap of $39,000. Since then, this Napa Valley vino has traded down to a $36,000 valuation. Heritage is featuring an auction lot that includes three bottles of Screaming Eagle Cabernet Sauvignon 2016 with the most recent bid sitting at $8,000. With a 23% buyer’s premium that pushes the current price of this offering to $9,840, heading into the final hours of bidding.

The $36,000 market cap on Rally is an even $3,000 per bottle. The $9,840 price tag on the Heritage offering is 3,280 per bottle, or $39,360 per case.

Overall the Screaming Eagle market has remained steady with this auction looking like a potential breakout after a few stagnant sales in the final quarter of 2020. Altan Insights tracked the last five Heritage auctions that sold 2016 Screaming Eagle and after an impressive sale of $9,840 in June 2020, results fell flat with sales ranging from $7,380 to $8,302.50 and closing at $7,995 to end the year. This March auction signals a positive step for the 2016 blend.

Wine investors on Rally can also follow price action from the producer Domaine de la Romanee-Conti. The esteemed estate, based in Burgundy, France is considered one of the greatest wine producers in the world. On September 4, 2020, Rally also offered an assortment of 2014 Domaine de la Romanee-Conti wines. The case is composed of a 12-bottle variety including two bottles of Richebourg and three bottles of La Tache. The IPO sold at a $54,000 market cap but has since decreased 7.41% and currently has a valuation of $50,000.

While the exact assortment is not duplicated at the auction, Heritage offered two bottles of 2014 Richebourg and two bottles of 2014 La Tache. When the final bids were cast, the Richebourg reached $4,797 with buyer's premium. This marks the highest Heritage sale for the 2014 batch from the DRC's Grand Cru vineyards. La Tache has historically carried a higher valuation than Richebourg as it is one of the two wholly-owned monopolies held by the DRC estate. From an investment standpoint, Richebourg is a wine that typically requires a longer time horizon to reach optimal taste which impacts the short-term value of its bottles. The two bottles of La Tache hit a final hammer price of $7,687.50, which outperformed its sale at the September 1, 2020 auction by 4% - a welcome sign for investors that the wine is holding serve on its early valuation.

While the overall wine market is designed for long-term appreciation, fractional platforms like Rally have injected a new level of liquidity to that space which increases the importance of relevant auction results. Cheers to the investors tracking these fine wines over the weekend! 

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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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