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Loeb: 'Failed' board dragging down Sotheby's stock

Call it the art of a Wall Street war.

In a new letter sent to Sotheby's shareholders Friday, activist investor Dan Loeb said the art auction house's stock slide is the result of what he called "failed leadership by the board of directors."

He claims the board has too little "skin in the game," since it collectively owns less than 1 percent of the company, and that its members are "overly focused on short-term metrics."

Loeb's New York-based hedge fund, Third Point, has put up a slate of candidates for the auctioneer's board. He says the nominees "will bring fresh perspectives" to the company, which he says suffers from "poor corporate governance."

Sotheby's has been fighting Loeb's efforts for months and last year adopted a shareholder rights plan, or a poison pill, that ensures investors cannot acquire 20% of the company's shares. Third Point is Sotheby's largest shareholder; in late March it held a 9.6 percent stake.

Third Point sued Sotheby's over the poison pill last month.

Read MoreThird Point files lawsuit against Sotheby's

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