Paloma Picasso was born in 1949, which means Pablo probably made this little toy guitar for her in the early 1950s. Picasso was in the sculpting zone at the time, creating playful, iconic works like his mother baboon with a toy car head, carrying her young; or the goat with the big basket for a belly. Of course, this Little Guitar inevitably brings to mind one of Picasso's earliest, most important cubist sculptures, a cardboard guitar he later re-created in sheet metal [and donated to MoMA.]
Why Paloma didn't keep her guitar, I have no idea, but her dad gave it to some friend. And that friend apparently gave it to some guy to have a display case made for it, then two years later, the friend dies and there's still no display case, and his widow's all, "Whoa, display guy! Where's our guitar? Polizia!"