Dan Loeb’s Third Point LLC has upped its stake in Sothebys (NYSE:BID) to 9.3 percent, and the hedge fund manager is looking for seats on the company’s board. The story, which was broken by The Wall Street Journal this morning, signals the start of what could be another long activist run from Loeb. According to a letter penned by Loeb and released this morning, Third Point wants to see the company’s chairman removed.

Dan Loeb

Third Point LLC disclosed this morning that it had raised its stake in Sothebys (NYSE:BID) to 9.3 percent from 5.7 percent in a filing with the SEC. The buy makes Third Point the single biggest shareholder in the auction house and the fund is clearly trying to use that power to shake the company up. A letter released by Third Point had some fairly unpleasant analysis on the management of the company.

Loeb letter on Sothebys

Loeb called Sothebys (NYSE:BID) “an old master painting in desperate need of restoration,” playing on the company’s auction business. According to Loeb the problems at the company are “a result of a lack of leadership and strategic vision at its highest levels.” The attack on the company has not yet been countered by management.

A quick look at the Sothebys (NYSE:BID) stock chart makes it difficult to see the malaise that Loeb is talking about. The firm’s shares have risen in value by close to 50 percent so far in 2013. Contemporary and modern art at Sothebys (NYSE:BID) is at the center of the Loeb attack on the company. Loeb said that the company’s CEO did not understand the importance of those works to its growth strategy.

Loeb begins battle

This is not the first major campaign that Dan Loeb has launched this year, but this has a better chance of success than his previous attempt. Earlier this year, Loeb attempted to change the corporate culture at Sony. That attempt failed in August.

Loeb appears to be out for blood at Sothebys and the company will be forced to respond to his criticisms soon. The battle will rage on, unless the board of the company decides to accede quickly.

172735936 Third Point Sothebys EX 99 3 by ValueWalk.com