April 28, 1987 was already a historic day in jewelry auction annals before the sale of the stone—a 95-point purplish-red diamond—which made this date doubly famous. That afternoon at Christie’s New York, diamond dealer William Goldberg had paid $251,000 per carat ($148,000) for a 59-point purplish-pink diamond—twice, minus $3, the auction record of $127,000 per carat held since 1980 by a 7.27-carat pink diamond. When auctioneer Francois Curiel banged his gavel to close the bidding, the capacity crowd broke into boisterous applause.
But Goldberg would have less than an hour to bask in glory because bidding for the most coveted item of the day, the red diamond, opened at $250,000, an instant new high of $263,000 per carat. Within minutes, the stone had gone to Geneva dealer Teddy Horovitz at $800,000. Add in the standard buyer’s premium of 10% and the total was $880,000. That’s $926,000 on a per-carat basis—an auction record nearly four times greater than the mark set an hour earlier and seven times greater than the top figure attained seven years before that. Today that all-time high still stands and most likely won’t be challenged for the rest of this century, unless, as one dealer quips, “the Hope diamond is put on the block,” Fat chance.
Meanwhile, tales as tangled as they are tall have sprung up around the red diamond, its origins, former owners and fate. Correcting the record about the auction world’s reigning per-carat-price record-holder takes you all over the map to places like Montana and Switzerland. But the chase is worth it. As befits a stone of this red’s stature, the truth is much stranger and more compelling than the fictions people have concocted. See for yourself.
Dream of Fields
Some say the consignor of the red diamond was a lowa farmer who wouldn’t come to the phone to hear a special patch- in the auction proceedings because he was busy milking his cows. How quaint. And false.
The actual seller was William Hancock, heir to the Montana-based oil exploration company, Hancock Enterprises, founded by his father, Warren, a fancy color diamond connoisseur who collected these rarities from the early 1950s until his death in 1981 at age 65. According to retired colored stone dealer Arnold Baron, who operated a jewelry store in Billings, Mont., from 1948 to 1977, Hancock got hooked on colored diamonds the first time he came in the store and saw a fancy blue diamond weighing just under 2 carats sitting in a showcase. “Lazare Kaplan had received a small quantity of blue roughs from De Beers as part of a sight,” Baron recalls. “Unsure what to do with the cut stones [colored diamonds were considered curiosities in those days], Leo Kaplan sent one each to customers with whom he was friendly to see if they could sell them.” Hancock was so taken with the diamond he bought it for $5,500—a steep price then but a tiny fraction of the stone’s value now.
That sale was the start of a lasting relationship between the two men, one so strong that Hancock provided the backing for Baron to buy a massive collection of colored diamonds when it quietly came on the market in 1956. It had been left to the son of a Brazilian diamond cutter who for decades bought rough from prospector countrymen (Brazil has been a source of diamonds since 1725) and kept the fancy color stones for himself, Baron recounts in a memoir called “Carats” he has nearly completed. “I wanted that collection in the worst way,” he says. “Fortunately, the son loved wine, women and song. Sooner or later, I was told, he would get thirsty enough to sell it.”
When Baron finally was able to buy the stones, he found that three of them were red or on the cusp of being so. The reddest and biggest of the trio weighed 95 points. Baron sold this stone, along with a pinker one weighing 59 points, to Hancock, charging $13,500 for the larger one. “I lost a few nights’ sleep worrying if the price was too high,” Baron says. “But in light of what happened when the stone was sold at auction three decades later, I should have had no qualms.”
After Hancock’s death, the enormous tax bill for his estate forced his heirs to make a choice: “Either sell the stones or the oil business,” says son William Hancock. “We chose to sell some of the stones.” Knowing the choicest diamond in the collection was the 95-point red one, the family allowed it to be displayed in Antwerp. A flurry of inquiries came in, but it was decided to sell this stone, along with others (including the 59-point pink), at Christie’s in April 1987.
The sale couldn’t have come at a better time, says Swiss-based dealer Harvey Harris. “It was the height of the junk bond and leveraged buyout craze,” he notes. “The nouveau riche sought the protection and status of high-grade assets such as fine art. The red diamond was like a Mona Lisa of gems.”
Seen as what Harris calls “the pinnacle of rarity” (there are only a handful of known red diamonds the stone triggered one of the most breathtaking bidding battles in auction history. Seconds after an Antwerp dealer yelled out an initial offer of $250,000 (a sum 67% above the official presale estimate of $150,000), many of the world’s most notable dealers and retailers entered the fray, each upping the other’s bid by $10,000 until the stone reached $500,000. Then, say observers, the field narrowed to two suitors, Lisa Moussaieff from London and Theodore Horovitz from Geneva. When the stone went to the latter for $880,000, he received a standing ovation.
It is assumed that Moussaieff and Horovitz were both acting as proxies for the Sultan of Brunei, an Arab ruler said to be building the grandest collection of fancy color diamonds of modern times. If so, they would have been working at cross-purposes, forcing the price of the red diamond to needless heights. But Horovitz denies he was an intermediary for the sultan, adding he has since sold the stone to a private collector. Asked if he was willing to go higher, he says he was prepared to pay $1 million for the stone. “I have only seen one other diamond that’s comparable.”
Horovitz might have had to ante up considerably more than $1 million if Ronald Winston, son of the late Harry Winston, hadn’t been en route by train from Beijing to Ulan Batur in outer Mongolia during the sale. Unaware the price would soar far beyond expectations and confident a bid of $500,000 or so would secure him the stone, Winston left strict instructions to stop bidding there. “If I had known what was happening, I’d have set a much higher ceiling,” he insists. “But I was in one of the few places left where there isn’t a phone.”
Please note: this profile was originally published in 1992 in Modern Jeweler’s ‘Gem Profiles/2: The Second 60’, written by David Federman with photographs by Tino Hammid.
The Hancock red diamond shown on the header weighs .95 carats and is courtesy of Christie’s New York.