There has been a lot of coverage in domainer circles (and beyond) of Demand Media’s S1, most of which run along the theme “Demand Media is losing money, why would anybody invest”. Which is a good question. I remarked the same back when Godaddy’s S1 revealed that even though they were the largest registrar in the world, they too were operating at a loss.
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Marchex (Ticker MCHX) recently announced that they will start paying a quarterly dividend of .02 per share, which at today’s closing price gives it a 1.7% yield. I was holding off commenting on this until the earnings came out, which happened today, as reported on TheDomains. After squeaking in a very negligible profit last quarter, they sunk back into loss territory this one. Which brings us to the one problem about the dividend:
Where are the earnings that they will supposedly come out of?
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After the recent news that Live Current raised $375K in a private placement, word arrived today that they closed another private placement yesterday: 46 more units for $225,000. That means an additional 2.3M shares (close to 10% of the shares out) and then 2.3M more warrants convertible into shares @ .15 cents within the next 2 years.
The earlier private placement was covered at Domain Name Wire with some follow-on analysis here.
Last night I completed the acquisition of the large-file transfer service FileSend.net. This basically closes the loop on a process that began over a year ago, the first time I saw the website listed on Flippa.
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As observed in DomainNameWire today, Live Current completed a private placement, selling 74 units consisting of 50,000 shares each for total proceeds of $370,000. Based on the current shares outstanding (roughly 24,000,000) this amounts to a 15% dilution of current shareholders. The units also include warrants to purchase an equal number of shares at .15 within 2 years. If Live Current manages to lift the stock price above that level, it will further dilute shareholders another 13%, based on the the number of shares outstanding of 27,700,000. Read more »
A new batch of Oversee.net shares just listed on sharespost at 4.37/share, placing the company valuation at 760 million. This is down 32% from earlier share offers at $7.35/share which would have put the company at 1.16 billion. Kinda, sorta. No recent transactions have actually taken place, just offers. So we don’t truly know an imputed value of Oversee until we see a sale actually take place.
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I wanted to circle back on Rick Schwartz’s near rant against people who can’t seem to follow his advice and “make it” in the world of domaining. In fact I’ll cite the exact same quote as I did in my earlier post about the .CO launch:
I think all these bozos are about to be schooled. Yesterday EVERY domainer had the EXACT [same?] opportunity to speculate and win or lose. All the big mouths will have their jaws dropping soon as they watch folks manufacture money from thin air. This proves they have no talent and just whine. Losers in every sense of the word. While others are enjoying success and creating even more, they will still be saying the same crap or sitting on the sidelines spewing hate instead of jumping in and do what a true domainer does and have the balls to speculate. If they can’t make it in domains which is a gift from the heavens, they will make it in nothing.” (emphasis added)
It’s a pretty stern assertion out of Rick, which I took to mean: If you can’t make it in domains, you can’t make it anywhere. I find that a very puzzling stance to take. [ This sentence was reworded after Rick’s comment – M] Read more »
The big buzz throughout the domainer circles this week is the launch of the .CO domain and domainers are busy talking up a storm about, not to mention everybody is piling into it. Some specialty .co aftermarket channels like flipping.co have already emerged, and of course, there are a few blockbuster aftermarket sales announced already.
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Bill Sweetman manages the Tucows YummyNames domain portfolio, and Tucows’ office is right down the street from mine. So after reading my articles on domain investing and Tucows, Bill suggested we meet for lunch. We hadn’t met in person until now even though we’ve been working in close proximity for awhile.
Over the course of our lunch we talked about managing aftermarket domain portfolios, and the higher margin business of selling domains to end-users at retail prices. When your cost basis is low (and in Tucows’ case it is basically the cost of wholesale registrar registration), it doesn’t take much to lock in healthy margins and decent profits.
5 key takeaways came out of our meeting, and Bill was good enough to expand on some of them via email later:
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Shadowstock is a another very interesting niche blog that covers “Deep Value Micro Cap Investing” and I’ve been following it for awhile. Once of his more recent ideas as a possible Ben Graham net/net is Looksmart (Nasdaq:LOOK), the “second tier” Pay-Per-Click search engine.
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