Was the Book that Sold at Auction for $3 Million 100 Times Overpriced?

When the Rare Book Hub compiled a list of the Top 500 prices paid at auction for books and paper collectibles in 2021, there was a bit of a surprise in the Top 10. It was a book of artwork and the storyboard for Alejandro Jodorowsky's planned movie adaptation of Frank Herbert's Dune. It never came to pass but it's gained something of a cult following. Between that status and the neat artwork, perhaps it's not that surprising that it went for the astronomical price of $3 million. After all, at #8 on that list, it was sandwiched between a comic book and a baseball card. These days people spend millions of dollars on unexpected things.

What was particularly surprising about this lot was how far off Christie's was in estimating its value. They gave an estimated price range of just under $30,000-$40,000. That is quite an underestimate. Rarely does an item sell for 75-100 times the estimate. What happened here?

The sale took part November last, but only recently has the internet come abuzz with talk about this price. The comments have generally not been very kind toward the buyers. Evidently, many people think Christie's had it right. It was the buyers who grossly miscalculated.

While the Dune book is rare, it is not unique. There are around 10 copies out there. It has never brought prices anything like this before. They were more like the Christie's estimate. What were the buyers thinking?

It turns out they weren't doing a lot of thinking, but perhaps some dreaming and serious miscalculating. The buyer was atypical, something called Spice DAO. What is a DAO? It's a decentralized autonomous organization, if that helps. It's a whole bunch of anonymous people whose organization is on the blockchain. I don't understand any of this either, but they're out there like cryptocurrency. Spice raised its money via crowdfunding. It raised a whole lot since it was able to buy this item for a crazy price and still has lots left over to promote it. The members voted to purchase the Dune book at the Christie's auction, and evidently price was no object.

When Spice DAO originally explained its mission, it said “We believe the artwork and storyboard in Jodorowsky's legendary Dune adaptation is strongly in the public's interest, and we hope to raise funds for the purchase so it can be in the hands of crowdraisers, not private collectors, and then collectively pursue projects that help its preservation and increase its accessibility.” It then explained its specific goals as:

1. Preservation (e.g. through professional digitization; to the extent permitted by law).

2. Accessibility (e.g. through public viewings and digital lending; to the extent permitted by law).

3. Awareness (e.g. through events such as a panel with the artists represented in the manuscript).

After the purchase, they updated their goals to:

1. Make it public.

2. Produce an animated series based on it.

3. Support community projects.

They also talked about such things as selling NFTs of the artwork.

There's one detail Spice DAO appears to have misunderstood. They don't own the rights to the Dune movie adaptation. They bought a copy of a book, not the rights to it. It's the same thing as you buy in a bookstore. Buying a book does not give you the right to reprint it, make a movie from it, or anything else other than read and sell your one copy. Since there are other copies out there, they don't even have any leverage. There is already a copy posted online that anyone can view. The copyright holders still control the work and reportedly they have not been willing to sell that to Spice DAO.

It appears that in this crazy time of inflated prices for everything from bitcoins to baseball cards, these amateur investors got carried away by their own enthusiasm. They forgot to pay attention to even their own admonition - “to the extent permitted by law.” There is no “extent” permitted by law. Now it's time to read the legal fine print.

That does still leave one question unanswered that might still make us wonder if Spice DAO knows something after all. Who was the underbidder? Did they know something?