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Falling Star: Record-Breaking Pink Star Diamond Sale Falls Through

Last November, the jewelry industry was abuzz with news of a broken record: the purchase of the world’s priciest gemstone. The Sotheby’s auction house listed the Pink Star, a flawless 59.6-carat pink diamond, among their offerings in a Geneva auction on November 13, 2013. Isaac Lot’s winning bid — $83.2 million — made headlines, but several months later, a new story is emerging. The diamond’s already back in Sotheby’s possession after Lot couldn’t pay up.

Why So Expensive?

Even the most basic genuine diamonds aren’t cheap, and natural colored diamonds are even more expensive; many a fiancé-to-be breathed a sigh of relief when colored diamonds made room in the spotlight for cheaper colored gems such as sapphire and emerald. But that doesn’t mean the pink diamond’s days in the spotlight are over; as the rarest natural diamond color — and the color of little girl’s bedrooms and Valentine’s Day hearts — it’s a marketer’s dream.

The Gemological Institute of America (GIA) officially graded the oval-cut Pink Star as the biggest internally flawless diamond of its color grade. The Gübelin Gem Lab confirmed the gem’s natural grade as Fancy Vivid Pink, the highest possible grade of pink diamond. For comparison, the $46.16 million Graff Pink was — and now still is — the most expensive diamond ever sold, and its Fancy Intense Pink grade is two steps down.

If 59.6 carats sounds impressive, consider its uncut original size: a rough 132.5 carats. It took eight experts twenty months to cut the diamond down to its current size, which still overshadows every other diamond in its class. According to Forbes, the next-biggest diamond in its extremely rare color grade is just five carats, and it was sold in Hong Kong five years ago for a fraction of the price.

A Celebrity Gem

The purchase was big news for Sotheby’s even before the auction, and after word of the sale spiked its fourth-quarter revenue, the default is putting them back in the news for different reasons. The diamond itself has had a high profile for eleven years, so it’s only fitting that its first public appearance was on the neck of a supermodel. After its discovery in south Africa and an exhaustive, two-year cutting process, Helena Christensen helped unveil the diamond in Monaco in 2003. Four years later, it received the lasting moniker “Pink Star” from its first buyer.

However, the Pink Star isn’t the only famous pink diamond; in fact, jewelers, gemologists and collectors have long relied on celebrities to keep up the status and trendy appeal of colored diamonds. High-profile engagements have kept pink diamond rings on tabloid covers for at least a decade. Kim Kardashian’s 15-carat pink diamond from Kanye West might be reflecting paparazzi camera flashes today, but she follows in some even bigger footsteps. Nick Cannon presented his wife Mariah Carey with a $2.5 million ring that included 58 intense pink diamonds around a 17-carat emerald-cut light pink diamond.

Pink Dream turned Nightmare

According to Bloomberg Business, Lot defaulted on his winning bid for the gem that he dubbed his “Pink Dream” after the high-profile auction. It took the Chicago jeweler just five minutes to win the auction, which started at $52.5 million, and he openly acknowledged an anonymous group of financial backers who helped him make the investment. However, four months later Sotheby’s has announced its repossession, a move that will damage their economic reputation more than their actual revenue. The Pink Star is currently valued at $72 million, and according to their chief financial officer, the company agrees with this estimate — at least until it leaves their inventory for yet another record-breaking owner, hopefully one who can afford it this time.

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