This article was written by Samuel Phineas Upham

Samuel Baker founded Baker and Lee in London in 1744. His first major transaction was to oversee the disposal of several hundred rare manuscripts, which he sold at auction. Baker was a prominent auctioneer, especially as related to books. He sold the libraries of Napoleon, John Wilkes, and Benjamin Heywood Bright.

Baker died in 1778, and his estate was divided between two of his closest associates. One of those men was John Sotheby, who extended the auction house to cover coins and medals. They eventually worked their way up into the fine arts market, but focused almost exclusively on pieces of historical significance prior to those auctions.

Sotheby’s went public in 1977, but it was privatized soon after its IPO by an American businessman. He originally incorporated the company in Michigan, but Sotheby’s was reincorporated in Delaware in 2006. It is currently the oldest company currently traded on the New York Stock Exchange, using “BID” as its signifier.

Sotheby’s maintains an extensive catalogue of its holdings online, for users to browse and make bids on in real-time. Auctioneers who hold live sales typically begin the process with a detailed explanation of the piece, ending with an announcement of the opening bid. The bidding continues until there is only one buyer willing to pay the auction price, which is often referred to as “the hammer price” because of the ceremonial slap of the gavel to signify the deal is closed.

The seller must provide Sotheby’s with a photo of the item, and fill out forms describing the item and its significance. Then a reserve price is set before the auction starts.

About the Author: Samuel Phineas Upham is an investor at a family office/hedgefund, where he focuses on special situation illiquid investing. Before this position, Samuel Phineas Upham was working at Morgan Stanley in the Media & Technology group. You may contact Samuel Phineas Upham on his Twitter page.