Bloomberg tries to make too much of the 25% drop in Sotheby’s stock price over the past month. Clearly there are many forces working on Sotheby’s stock. One is global monetary policy which also drives commodity markets. From the chart above we can see that oil and gold stocks have declined along with Sotheby’s suggesting a substantial part of the decline is driven by macro factors. (Not the Meiyintang sale in Hong Kong, as one particularly obtuse commenter has suggested.)

Add to that the fact that stock prices anticipate future growth and prices in the art market recently stopped exceeding estimate ranges.

“The expectations were getting higher and higher and it was reflected in the stock price,” said Jason Benowitz, portfolio manager at Roosevelt Investment Group Inc., one of Sotheby’s major shareholders which bought the stock in the beginning of 2010 for a price in the low $20s.

“That story began to change during the last days of the Hong Kong auctions in April where the results were within the estimate range, not exceeding them,” Benowitz said.

New York’s round of auctions only confirmed that trend. Estimates have caught up with the market at all of the houses, including Sotheby’s. That leveling off disappoints forward-looking investors who rotate into the next sector in search of returns:

“People have come to expect they will continue to deliver the tremendous results they have been,” said Benowitz. “In this case, the results were at the low end of the estimate.”

Sotheby’s Stock Drops 25% After Top Lots Disappoint in Hong Kong, New York (Bloomberg)