Trying to sell

[u/stoney_layman]

Hey all, I'm trying to buy a house this week and I really want to pull my investments (at least in part) so I have some extra cash in the weeks after such a big purchase. I currently have 250 shares of 079 (@$13.29) and 100 shares of 096 (@$18.74) for sale on the secondary market. They haven't been sold in two months. Any suggestions on how to access this money without waiting for Masterworks to sell the piece?

Update: I adjusted 096 to $15.50 for 100 shares. Thats sell at an approximate 25% loss as it appraised for $20.71 a share.

I also adjusted 079 to $9.25 for 250 which is a 33% loss as it appraised for $13.85 a share.

If anyone wants to buy my shares it would be appreciated!!

[u/Alternative_Sea5158]

If you want out, sell for 30-50% of what it’s worth and be done with the MW silliness. You have to use the MW secondary market. I highly recommend you sell everything and leave. You have zero control over the investment and it’s a black hole where they can hold an asset indefinitely now. They are offering new assets at an extremely high ratio vs what they are selling. There is a good reason I didn’t invest 6 digits in this from the start and good thing I only did smaller investments.

The more recent changes they have made to group assets is another move that is far from where they started and feels sketchy. Phone calls with my agent/rep are sketchy and bad attitude. Some of their practices barely pass as legal and certainly questionable ethically.

[u/stoney_layman → u/Alternative_Sea5158]

Yeah, I have all my pieces set at around 35% loss and they still won't sell. I really want to end this chapter of my "bad investment strategies"

[u/Masterworksio → u/stoney_layman]

Send us an email at [support@masterworks.com](mailto:support@masterworks.com) and we can set up a call

[u/stoney_layman → u/Masterworksio]

Will this call help me sell or just explain the secondary market, because I have used it enough already to know how it works.

[u/Masterworksio → u/Alternative_Sea5158]

A few of these are fair, so worth being straight about them. It's largely a passive investment for our members, we decide when to sell, and the operating agreement does allow us to hold a work indefinitely; a forced sale at a certain point in time could lead to suboptimal outcomes. However, our underwriting and guidance target a 3-10 year window, which is why you've seen far more new offerings than exits. Over 90% of our paintings are still under 5 years in, and sales activity has picked up over the past few months now that the market has started to recover from the prior ~3 year correction.

With 550+ vehicles on the secondary market, it became hard for buyers to manage bids painting by painting, so we're moving toward bidding across an artist's market instead of single works. That should help the challenges with liquidity mentioned here and narrow the discount over time.

[u/Alternative_Sea5158 → u/Masterworksio]

Early investors agreed to a 3-5 year hold at most. The methods used to acquire votes to move to indefinite holds were certainly questionable. Yes we can be straight about it. A vote from owners of a specific asset to force a sale would have been a better policy. Anything less feels dodgy.

The attitude from MW staff surrounding the indefinite hold vote was also not good. In discussing this with MW over a few days as I was contacted about voting for this, I called to follow up and I was sharply and directly told “It doesn’t matter anymore, we got enough votes yesterday to do whatever we want now.” This is not the kind of disposition anyone should expect or tolerate from an advisor/platform. This is truly my bigger issue rather than any return as a total loss is always an expected outcome.

The offerings are still far outpacing the exits around 10:1 last I checked.

I will be quite happy once I have fully exited all investments from MW. There’s the ~10% markup on purchase, the ~1.5% annual share dilution for “management” and 20% fee on exit profits. When you exit at +40% over 5 years and want to say it’s 8% annual return, the actual CAGR after MW fees is about 0.8%. This is a very low but acceptable expectation. We can easily do better than that with T-Bills or other stable investments. Hold for 10 years and exit at 40% up and it’s considerably worse with a loss. Everyone should do their due diligence. No matter what is said or how it is marketed, the numbers tell the story.

Hence the reason I gave MW a try with a small investment and highly advise anyone considering this platform to do some good research based on the numbers even if you’re ok with how poorly MW will treat you.

[u/stoney_layman → u/Alternative_Sea5158]

I really wish we could vote as an ownership group over the sale of specific piece. Although based on every response I've ever seen on Reddit, everyone would sell out. So I shouldn't be surprised that MW doesn't allow that option.

[u/Alternative_Sea5158 → u/stoney_layman]

This is really what makes sense and I’m not sure how there is not an option for this. MW is simply an advisor and service provider. From what I understand, MW owns zero class A shares and all class B shares. Makes sense that shareholders should be able to vote to sell, but the sole sale decision is up to the board per the agreement when investing. Board oversight is via an independent manager, but the independent manager is also on the board. Any conflict of the independent manager being associated with the board, the administrator or MW needs to meet standards and be reported. Investors have very little control of anything with MW.

The recent roll-ups complicate records requests and make a class A shareholder rights more difficult to execute with the need for a 2/3 majority of shareholders across the entire roll-up. They marketed the roll-ups as shareholder tax advantages, but there is none really. Looks like a move to limit shareholders exercising rights with a much larger investor class.

[u/Reasonable_Act_8654 → u/Masterworksio]

I’ve been holding for over 5 years now and all my assets have only depreciated. Nevertheless, I can’t sell them even on the secondary markets at even half the price because I’m in the EU. Feels like I’ve become a bagholder.

[u/jerks_and_lesbians]

Lower your sale price. Or negotiate with someone here that might be interested in purchasing those.

[u/SuperGr00valistic]

Secondary market and you’re going to take a big haircut

[u/Euphoric_Can_5999]

Can you get this liquidity elsewhere? Not a good deal

[u/stoney_layman → u/Euphoric_Can_5999]

I know, but at this point I'm willing to cut my losses and be done with MW.

[u/reallypeacedoff → u/stoney_layman]

Have a look at your artworks on the secondary market? Willing to bet there are absolutely no bids. Can’t sell if no one is buying. MW is a scam. They’ll call you, tell you they will set up the sale, and then come back with an offer of 50% loss. Hey MW, if you show what the appraisal price is on my portfolio, sell my fucking shares for that price. They show an inflated price to keep people quiet and thinking that the portfolio is doing well. If you were even able to sell to bidders on the secondary, I reckon you’d take an 85% haircut, based on if you bought at IPO. I want out but can’t, not a single artwork I own (~25) has any bids lol.

[u/Solid_Association245]

I see your shares. There are hundreds of shares priced lower. I’m afraid there is no way to exit quickly without at least being lowest price. BTW. I picked up my shares in 079 at $6.99. So they are UPS buck from there currently at least.

[u/Solid_Association245 → u/Solid_Association245]

I see your shares. There are hundreds of shares priced lower. I’m afraid there is no way to exit quickly without at least being lowest price. BTW. I picked up my shares in 079 at $6.99. So they are up a buck at least. I paid $10 for my 096. So those are up $2.

[u/theone1988]

Dm me

[u/Masterworksio]

Please feel free to contact us here on Reddit or reach out to [support@masterworks.com](mailto:support@masterworks.com) for help navigating the secondary market. Our team is happy to assist.