Then the questions began: Would the sale remain valid?
Several experts suggested that the shredded artwork could now be worth more than the original. Thanks to a statement from Sotheby's on Thursday, we now have an answer.
The buyer, who does not wish to be named, said: "When the hammer came down last week and the work was shredded, I was at first shocked, but gradually I began to realise that I would end up with my own piece of art history".
The buyer has agreed to take possession of the piece at the $1.4 million price despite the shredding, Sotheby's said.
Pest Control, a firm acting on behalf of the elusive artist, has titled the new piece Love is in the Bin. It's now: "Love Is in the Bin" (2018).
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Like a phoenix rising from its ashes, the tattered "Girl with Balloon" by Banksy has been reborn, recertified, and renamed as "Love Is in the Bin", and the winning bidder is keeping the work, strips and all.
The announcement follows a week of negotiation between the buyer and the auction house and unprecedented speculation over the stunt.
But Sotheby's denies it was involved.
Alex Branczik, Sotheby's head of contemporary art, Europe, told The Guardian: "Banksy didn't destroy an artwork in the auction, he created one". Absolutely not. Do you really think Banksy, who spent his youth stencilling walls in Bristol and dodging the local authorities, would want to collaborate with the art establishment?
Banksy's painting Girl with Red Balloon was shredded after its sale at a Sotheby's auction in London.