The long-running battle for control of Artnet, the art media and auction data company, finally came to a head yesterday during the annual general meeting in Berlin, which lasted 14 hours and caused the stock to drop by 20 percent. At the shareholder event, grievances were aired, tables were pounded, and one shareholder even complained the company wasn’t doing enough to protect him from the Spanish aristocrat sitting beside him. The aristocrat happened to be the husband of prospective board member Sophie Neuendorf, who was, he claimed, trying to intimidate him. One person in attendance told me that the meeting resembled a “Jerry Springer episode at a circus.” The annual general meeting had attracted a number of factions—some existing shareholders, others waiting in the wings—interested in reviving the company to cater to a perceived underserved demand for art market information. Yet, according to one interested party in attendance, no one seemed to have an overall strategy for the company, nor did anyone present a clear plan for its future. Artnet C.E.O. Jacob Pabst presided over the event. His sister Sophie was a candidate for a board seat, and his brother Albert was seen working the room to drum up support for the family’s slate. Hans Neuendorf, the 88-year-old founder of Artnet and paterfamilias of the Neuendorf clan, whose members take substantial salaries from the company, was notably absent. That was probably a good thing. A significant part of the meeting, according to one neutral shareholder, consisted of investors airing their misgivings and  “telling the board and management to resign today.” The result, according to this shareholder, was “total humiliation for the Neuendorfs—all of the family members.” (Curiously, according to another shareholder, the shareholders excluded Hans from the list of board members they demanded to vacate their roles. Not that it really mattered.) The battle lines were drawn between three main factions. On one side was the family plus Brewster “Bill” Fine, a longtime executive of the company, shareholder, and lender to the firm and family confidant. (Of course, he did spend a few years trying to beat the family at its own game with rival Louise Blouin, but that’s a story for another time.) Fine had his own shares to vote, along with some other holders of single-digit ownership stakes, like gallerist Karsten Greve. Combined with the Neuendorf family stake, Fine’s group accounted for a little more than a third of the voting rights. On the other side, as we’ve chronicled for nearly a year, was Rüdiger Weng, the company’s largest shareholder, who owns his 30 percent stake through his company, Weng Fine Art. Weng’s activist campaign has unleashed the fury of shareholders, who had remained quiescent for decades. In between the Neuendorfs and Weng stood another third of the shareholders, dominated by Andrew E. Wolff, a former Goldman Sachs partner, and Andrea Schaeffer, who owns inherited shares through a German property company called SSP. Together they control another crucial 10 percent of the company and have been voting together as a bloc. Aside from venting their spleen, the shareholders were tasked with making several decisions: Would the board of directors (who choose the company’s C.E.O. and decide strategy) be composed of three or five people? Who would those directors be? And, critically, would the threshold for voting for a capital raise be lowered from a supermajority to a mere majority?

Wolff, who had been working with Weng to oust the Neuendorfs, ended up being the spoiler. Weng was happy to include Sophie on a five-person board as long as he got a seat. In a last-hour switch, the board would continue to comprise three directors. The Neuendorfs would not have a board seat—but neither would Weng. Around 10:30 p.m., the vote for the board finally took place. The Wolff-Schaeffer bloc pulled off their coup. Pascal Decker, a former board member, was reinstalled. Roy Israel, who had been proposed by the Neuendorfs and Weng as a director—perhaps because he made a seven-figure loan to the company a year ago and was willing to continue to provide financing—was also elected. Rory Normanton, the C.E.O. of two companies within the digital art ecosystem, and Weng’s final candidate, was elected as well. One of Normanton’s companies is Artfacts, which gathers exhibition data from galleries around the world; the other is Ocula, an Artsy-like gallery marketing platform that also has a very profitable art advisory business. When I asked Normanton whether he felt conflicted out of the seat, he demurred. “Neither Ocula nor Artfacts have any M&A plans. If ever a transaction were to materialize with a related party, I would have to recuse myself from the vote,” he said. He also believes both companies have different market positions and value propositions. I would say they are obvious elements in the roll-up Wolff seems to be engineering. Anyway, all parties agree that Artnet’s tank is empty, and if the company is going to succeed, it will need a substantial infusion of capital. But this stalemate, and the failure of any side to propose a long-term strategic plan, rendered a capital raise impossible. The fractious crowd would not approve lowering the threshold for a cash infusion down from a 75 percent supermajority to a 67 percent majority, thereby nuking any chance to take on more money to improve the company. Effectively, the shareholders have raised the white flag and signaled that the company is in play. Enter Garry McGuire Jr., an HBS alum from a San Francisco–based company called Art Technology Holdings, who waltzed into the meeting and announced that he planned to make a bid. That seemed, however, like a nonstarter. A quick check of McGuire’s LinkedIn shows that he’s been involved with Art Tech Holdings for all of four months. ATH describes itself as a “SaaS art-tech software company” trying to eliminate “B2B buyer/seller friction of discovery and authenticity” using “AI and blockchain technology.” One problem for any takeover plan has been the stock price. The board fight had driven the stock to a recent high of €8 per share. Even with the postmeeting drop to around €6 per share, the company has a market capitalization of around €34 million, which is a lot for a business with no profits and no clear path to profitability. In other words, there’s no white knight coming to save Artnet from itself. For decades, the company has been plagued by fantasies of using its position as the standard database for auction results to conquer the digital sales of art. But that really isn’t a friction point any longer. Galleries and auction houses are quite capable of selling art using the current tools at their disposal. Neither Artnet nor Artsy nor any of the several other businesses that have tried to create scale in the art market have succeeded. Wolff’s plan may involve rolling them all up, but to what purpose? In fact, over the past decade, as we’ve discussed here more than once, the art market has remained flat or shrunk in real terms. That brutal fact has done more to break the dreams of digital dominance than even the Neuendorfs’ hubris.

Once again, Libbie Mugrabi finds herself in the middle of a story with no one to root for. The former wife of David Mugrabi, The New York Times revealed today, is embroiled in a dispute with Art Capital Group. The lending company has taken the highly unusual step of saying that it sold an Andy Warhol Jackie painting that Mugrabi had signed over as collateral for contractual obligations, related to a nonrecourse loan she’d been trying to get on a much more valuable Basquiat painting. Unbeknownst to most people, you have to pay a fair bit of money upfront to get a no-recourse loan on a painting. ACG seems to have used this to gain access to the Warhol, which it claims to have sold to cover its costs. If the financial illiteracy of the ex-wives of art dealers isn’t your thing, there’s always Adam Moss’s Vulture column on Lisa Yuskavage for weekend reading. Doing a variation on ARTnews’s 20th century “Paints a Picture” column, the former editor of New York explains how Yuskavage makes her paintings, which is also a variation on his book about the creative process, The Work of Art: How Something Comes from Nothing.

That’s all for today. Have a great weekend, everyone. We’ll be back with more on Sunday night. M