OT today's society, Whatnot vs Sotheby's

[Rhotchkiss]

There is a lot to unpack here. Comparing the Whatnot valuation to Sotheby's: First, I think Whatnot is considered a tech company, whereas Sotheby's is more old-guard/traditional, with tech companies getting higher multiple-valuations than traditional companies. Second, Whatnot is a very young company compared to Sotheby's yet it had the same amount of sales in 2025 than Sotheby's had when it sold, meaning that Whatnot is growing and growing much faster than Sotheby's. Third, I expect the pool of buyers is much deeper for a tech company than a human-capital-intensive auction house, selling high end items online and in person from major cities around the world. Fourth, and related to the other points -- I expect it costs Whatnot much less to make a $1 than what Sotheby's must spend to make a $1, and I bet Whatnot is much easier to grow and scale than Sotheby's at this point -- Whatnots best days may be ahead of it whereas Sotheby's likely peaked. Finally, I bet Whatnot fits multiple capital buckets of private equity -- tech, retail sales, emerging, etc., each if which buckets have different return targets. I expect Sotheby's is less dynamic and more "core" on a returns profile, but likely with more downside, so capital is likely investing in lower returns with higher risk. As such, capital cannot overpay on the acquisition and grow its way of a bad deal. Add that to the fact that the pool of subsequent buyers is shallow, and the buyer of Sotheby's needs to be more prudent and frugal.

Then you ask "Are they profitable? If yes, than why are they bothering to sell more of the company to raise money? If no, then why are they "worth" so much?". One reason they sell part of the Company, regardless of whether they are profitable, is to monetize equity for the founders and employees who have been compensated in equity. We start companies to make money - make money from operations and, ultimately, from the sale of part or all of the company. They sold to make money. God bless'em.

Are they profitable? Who knows, although my gut is yes. Regardless, the pathway to growth seems relatively clear and the track record of rapid growth seems established -- they grossed $6b in 2025 like Sotheby' likely in its 50th++ year grossed $6b in 2019 - and eventually they can grow themselves into profitability.

Bottom line, Whatnot is hot, Sotheby's is not. Good for the Whatnot people.