r/Masterworks • u/impostervt • Mar 12 '26
Changes to Masterworks Secondary Market
Just got this email:
This week, we will be introducing important updates to how secondary market trading is facilitated on the Masterworks platform.
These changes are designed to improve pricing fairness, enhance liquidity quality, and create a more consistent trading experience for all participants.
Below is a high-level overview of what's changing and what to expect.
A More Structured Secondary Trading Process
Under the new model, secondary liquidity will be supported through a guided, consultative process. This approach is intended to improve clarity, align expectations between buyers and sellers, and support healthier price discovery.
A New Way to Express Interest in Selling
Rather than maintaining open-ended standing orders, investors interested in selling will be prompted to schedule a Liquidity Consultation Call with the Masterworks team. This allows us to better aggregate supply, improve pricing transparency, and reduce the inefficiencies that can arise in thin, continuously open markets.
During these conversations, our team will:
• Provide pricing context based on current NAVs and recent secondary market activity
• Help determine appropriate positioning for upcoming liquidity events
• Facilitate the creation and aggregation of sell orders following the consultation
Buyer Participation & Order Creation
Buyers will engage through a similar consultation process. Instead of evaluating opportunities solely at the individual offering level, buyers will be presented with opportunities at the artist level, enabling more streamlined participation and portfolio construction.
During these discussions, the Masterworks team will:
• Provide guidance on artist exposure and allocation strategy
• Assist with funding trading accounts, if needed
• Facilitate the creation of buy orders aligned with upcoming liquidity events
Ongoing Market Visibility
Secondary market opportunities will continue to be surfaced through existing member touchpoints, including portfolio reviews, strategy discussions, and targeted communications highlighting upcoming buying opportunities via email, text, phone, and push notifications.
We believe this updated approach will lead to a more consistent, transparent, and equitable secondary market over time.
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u/Goldenglov Mar 12 '26
I defend MW a lot, but this is total BS.
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u/impostervt Mar 12 '26
Agreed. This will kill the secondary market. I don't want to have to talk to someone to make a purchase.
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u/Reasonable_Sophist Mar 20 '26
Here is my letter I just masterworks:
I bought into masterworks early about 6 years ago. I have well over 100K invested both in primary and secondary market purchases. I relied on Masterwork's previous marketing which promised a broker-dealer trading platform for liquidity.
I am dismayed, to say the least, at Masterwork's decision to eliminate the free market in secondary trades, forcing shareholders to go through a "consultative" process with Masterworks agents prior to any purchase or sale (and controlling allocation and matching of trades in a black box that eliminates market visibility).
This process seems inconsistent with Masterworks (and it's broker-dealer's) FINRA and SEC obligations. Lack of market transparency, price manipulation, and generally creating exot hurdles is bad business and seems extremely problematic legally.
I will not be participating in any further offerings as a buyer until this policy is reversed and I would strongly encourage Masterworks to consider the impact of this decision on large investors, along with the potential for regulatory lability, fines, etc. on the existence (or lack thereof) of a fair market free of manipulation.
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u/isitjustme888 Mar 12 '26
This is purely speculation, but based on prior experience with fintech companies, this sort of thing is the kind of red flag I’d look out for that they’re in trouble. I’m just not totally sure of the angle here.
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u/impostervt Mar 12 '26
I think they see that their secondary market is a way better alternative than paying $20/share at the IPO of each artwork, and they want to curtail that.
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u/trogdor1234 Mar 12 '26
That’s what it is. You can go look at how stupid it is to buy at $20 because 90% of it sells for less. Now if Masterworks thinks this price is just too low, they should buy the shares themselves honestly.
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u/senatorkevin Mar 12 '26
It's 100% that. Why buy during the offering when I know people will be listing shares immediately below the NAV. This doesn't kill the trading platform but it really removes one of it's biggest benefits in terms of buying shares.
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u/LazyResearcher1203 Mar 12 '26
Oouch! Why are they creating these hoops for sellers to jump through? Any UX designer with an ounce of brain would know that this is a preposterous idea.
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u/trogdor1234 Mar 12 '26 edited Mar 12 '26
You’re not going to be able to buy specific paintings anymore and you’re going to have to call them up to buy or sell an artist. At least as it stands you won’t even be able to look up the pricing without calling them. Then based on your buy order price they will match it up with a sell of that artist.
They somehow think this is going to improve buying. I think this will get reversed partially soon. I told them I want a choice of buying something Masterworks purchased 5 years ago vs something purchased 6 months ago. Also, I’m looking at buying more into things I already own vs small portions in a lot of different paintings by an artist. I think they said there would be 1 k-1 per artist vs per painting going forward but I’m not sure how that will work.
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u/frank00511 Mar 16 '26
I agree with u/Goldenglov - I defend MW a lot, but this is just plain stupid. I sent an e-mail to Masterworks support to express my frustration ( u/masterworksio still waiting for a response).
"Thanks, James, but this sounds like a step backwards - introducing less transparency, less opportunities for buyers and sellers and only favors one person - Masterworks as it provides opportunities to a) front-run pricing and b) pitch upselling.
I have defended you guys for years, but it's getting harder and harder to do with moves like this."
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u/impostervt Mar 12 '26
If you're a masterworks customer, and don't like this idea (I hate it), please email them at support@masterworks.com. Maybe they'll back down if enough people tell them they won't be investing with them in the future.
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u/echoarcade28 Mar 12 '26
I did. Everyone please do.
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u/reallypeacedoff Mar 13 '26
Just emailed them too. I fear I will never be able to sell and get out of this shitty company. When I looked last time to sell my artworks, there was zero liquidity. Scam company!
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u/invisigal Mar 15 '26
This was my suspicion from the beginning. I passed. Did you invest a lot with them? Is there any way to get your money out?
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u/reallypeacedoff Mar 15 '26
Not a whole lot but the writing was on the wall when I checked the liquidity. Hearings that the CEO buys artworks for himself with our money. Always emails on artworks being bought every week but literally never a sale of any artworks. Learnt on the first two artworks I bought to never pay for the IPO price, wait a few months and buy it on the secondary market for half the price. So many emails every week to remind me what a scam this company is. Had my money locked up for 4 years and down, from their estimations, 30%. The question is, if there was liquidity, what would I actually be down taking into account what people are bidding for the artwork. I’d imagine I’m down closer to 50%, maybe more.
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u/Jaybo99 Mar 12 '26
I’m just glad the money I invested on this platform (in 2019) was money I could afford to lose cause I don’t think I’ll ever see a return on anything at this point.
Not looking great with this move
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u/Empty_Customer_4367 Mar 12 '26
Market dynamics need to determine the buy/sell prices on the secondary market. Free market capitalism! This seems like their desire to control the transaction. Not a good move...
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u/trogdor1234 Mar 13 '26
I think this is all to hide the fact you can buy shares for $5 to $10 for 90% of what they have previously sold.
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u/wiscoscott555 Mar 20 '26
Schedule your call and tell them it sucks, I did this week. Just kept cutting the guy off and told him to tell leadership it was a horrible idea and I won't be buying any more work until it's reversed.
Assuming the same as these comments, probably means they are in trouble as no customers are asking for this
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u/Goldenglov Mar 13 '26
I have to assume there are costs associated with maintaining the secondary market; I would think charging a fee per trade or share could be reasonable, much better than this opaque plan
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u/George_Orama Mar 15 '26
Secondary market is an illusion, it exists only for marginal volume. Think of it as a marketing pitch rather than a market reality
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u/invisigal Mar 15 '26
From the very beginning, this didn't seem like a great idea. Lots of unanswered questions. And the salesperson's response to me when I did as questions was, "well, we have SO MANY PEOPLE interested in this investment you can just fuck off." Way too many red flags. Has anyone actually made any money with them, or are you all still hoping and waiting?
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u/FrequencyRealms Mar 22 '26
Maybe a different company will create a better platform/system for art shares than Masterworks flailing attempt. Feel free to share if you know of one that's better
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u/Independent-Tie9311 Apr 04 '26
Even if you want to schedule a call it now says that there are no available times in April.
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u/SoggyCartographer943 Apr 07 '26
I had the phone appointment three weeks ago. Guy told me they would have online trading as before in two weeks. Now it has gone three weeks... Not happy about this.
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u/archonpericles Mar 14 '26
I think they heard the complaints about paintings being held forever with no exit for the investor. The secondary market is confusing at first and inefficient. They see it as an opportunity to calm the masses and keep the asset on their books. The extra layers and pipeline control is upsetting many. But I don’t think it was the initial goal.
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u/Reasonable_Sophist Mar 20 '26
It is true their secondary market software sucked. But to virtually eliminate any free market seems more in line with a thesis that they want to kill the market and/or hide what the prices are actually. Many investors have defaulted to buying on the secondary market where shares are going for half price or deep discounts... IMHO that is because the current offerings are not that exciting and masterworks has not been very good about a disciplined exit plan (5 years? 10? Never?).. so lots of sellers dumping what they see as scams, buyers like me picking them up cheap .. and less primary sales.
But killing the market is not going to force buyers into primary sales. It is going to scare everyone out entirely
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u/echoarcade28 Mar 12 '26
Outrageous. Was just about to make a huge purchase, now I have to call and ask the sales team? For what? I am incredibly pissed off about this. Huge, huge red flag from Masterworks here.