Member Info for Silverblade

Price breakout...?! SB

Interesting - Ascio are a reseller owned by Tucows (bought for $30m in 2019). So although Ascio are down as the registrar it is likely the domain purchases are being made via their reseller network. SB

2crazy - not that I think it will be repeated on the same scale - but mmx probably secured anywhere between $50m - $100m from domains auctions in the first round. We were awash with cash at one stage. Its still a bit away, but its quite a small market in term of operators with scale, platforms and analytics to drive growth. That said, a majority here would prefer we were taken out sooner rather than later so as you say we might not be around anyway. Michael didn't appear too excited on the call last week when asked about our participation - which probably gives away their plan. SB

You might be right Ursupator - even at those prices law is still a premium domain - and has done well in 2020 so far, albeit from a low base. Pricing would tie in with adult domains if your correct. My issue was more about the revenue share arrangements - and whether they are disproportionate to the revenue. SB

Hi SS - quite a few vip deletes (as bakky had noted) - but everything ticking along. I did wonder who is selling at these levels - possibly remaining ICM management team following SJL's exit - it does looked planned in terms of volumes and timing. SB

Looks like our seller is still active. On the positive side these likely sells are being soaked up - perhaps someone else is building a position in anticipation of the results - we know the likely revenue and cash flow - what will be interesting is the COG's; partner payments; overheads; PBT and current cash position. Oh and the D word..... SB

….(part 2)…..even it didn't take as long as 5 years!! Its going to have to be a very healthy exit price if I'm drinking a half pint of lager shandy tops. SB

Blimey - that siege didn't look a lot of fun for the local residents,although

Afternoon Hucks. As we know - law was launched in October 2015 with great aspirations to sell domains to ‘professionals licensed to practice law by an approved regulator”. In relation to china – law was one of 4 domains approved for use in October 2017, leading to law being officially launched in china in June 2018 as a high value domain. It is unclear as to the exact restrictions on domain sale’s – however we do know there were healthy billings in Q1 2019 – and the company appears to have been keen to further strengthen law’s credibility in china by seeking its endorsement as an approved web address for lawyers in China in the second half of 2019. It is not clear if this approval has yet been granted – but it does appear based on recent evidence that domains ‘investors’ in china are securing domains which are outwith the original ‘professionals’ requirement.

As for the point on II’s strategy – no this was not discussed – there was a comment from Toby that it is a small market and the company regularly talks to its peers when quizzed about any ongoing dialogue with the three interesred parties who previously submitted ‘offers’ for the company at the time of the strategic review. But if you look at the background of some of our II’s – it is pretty clear what their game plan is – medium term capital appreciation. Whether that involves a monkey or otherwise.....! SB

Almost 400 law sales reported today. Lots of single letter and number sales - so likely Chinese purchasers involved - but cant see what registrar was used yet. Includes 8.law - some of these must be classed as premium domain sales. SB

Strange trading pattern over last 10 days. Can’t quite work out what’s up – MM’s either helping someone to acquire or exit at c.6.2p. 10m shares – so not that significant in overall scale – but in reasonable chunks. 6p seems to be the price at which finncap step in carry out buybacks - so that's the price floor for now imo. SB

YHAL - I agree it was not a particularly inspiring response on dividend - and that response was from someone holding 23 million shares. I think Toby is in favour - but that does not mean it has full support. SB

I agree with your comments on law bakky - it has not performed to expectations. But - as a stand alone domain with 15,000 domains generating decent revenue it should be a growing jewel - but there are concerns over its historic commercial arrangements which like other areas of business have had to be or need to be addressed. How many skeletons do we have for goodness sake! Part of the 5 year plan...…?! SB

bakky – I would be surprised if the dividend is postponed any further. As you note the previous conditions for delay do not appear valid anymore - and it is unlikely any payment would be processed until November at the earliest at which point we will have the 4/5 months of additional cash beyond June 30 $7.3m interim balance. That said – the dividend is PI focused – our II’s are looking at the exit strategy – so as long as they are in agreement with the introduction of a payment we should be OK (and clearly they were supportive in January). If no payment is announced, and management get another slug of options – any remaining faith we retain in the board will rapidly disappear imo. SB

Ahem....well spotted bakky!! Sorry I was doing some back of the packet calcs and used my low end of $100 per domain in my post - It should be $2.25m - but to be honest that does seem very high - but might support large partner payments if we gave up a large %? As I say - just trying to work out who we pay $2.9m....SB

Had a look into .law as discussed with 2crazy last week to try and clarify the string ownership. mmx secured the .law domain as a result of a private auction in sept 2014 – the purchase price was not disclosed. At the time the company disclosed it worked with a third party in the auction to secure the rights – with an assumption the third party provided auction funding – apparently in exchange for the rights to receive a share of ongoing .law revenues (they are not involved in the management, operations, or policy-making of .law). The reference to shared ownership came from Fred Kruger in 2015 where he noted mmx owned 50% of .law (with a value of £10m) . I think this was an error – the ICANN record is quite clear – the registry agreement states mmx own 100% and that is the position reiterated by the company on its own web site. The identity of the third party has never been disclosed. However – at the time of launch mmx established a dedicated web site (join.law) - to market domains sales and appointed an executive team (Lou Andreozzi- CEO; Carl Jaeckel – COO; and John Morgan – Chairman) to lead .law. I suspect these positions were related to the third party.

Law also benefitted from a sales partnership with the US based Legal Marketing Association (LMA) with certain restrictions on who could purchase; and an advertising/marketing partnership with ALM Media to promote the domain in legal media publications.

Law started off as premium domain – I think the price was c. $200; although this is now about $100; and the company has licensing rights to sell in china.

Law has c.15,000 domain registrations (up 25% since start of year) – difficult to be precise about revenue given historic and current pricing – but let’s give it the benefit and say average revenue per domain is $150 – so $1.5m revenue per year?

Given the understanding our 50% disaster in .london has been addressed; our 33% holding in .review (12,000 domains); 50% of country (1,000 domains) and the .law strategic arrangement with a third party cost us $2.9m in partner payments in 2019 (up from $2.5m in 2018)– which would appear to be in excess of the combined income generated from all three strings. Unless there are more third party deals we are not aware of? Or is law another london…..with a minimum guaranteed revenue? And if so how long does the deal last? (london was 10 years). As always – this is based on a bit of research at my end – and as such are my observations/conclusions – and should be treated as such. SB

Hi Hucks. The Western Isles – lucky you. If you think weegies are broad try Orkney Isles next! Toby dealt with the dividend question early on – but it still got asked. Guy responded to a question later that we will find out in Sept – although it was a bit unconvincing. The 0.1p was an example from me on how much that would cost the business. The only time I heard a dividend mentioned was finncap earlier in the year where 0.13p was suggested – but then covid, divi cancelled and we await update in 3 weeks time – date to be confirmed. SB

2crazy / you might be into something there. I thought mmx wholly owned law - but there might be a side deal which accounts for the partner payments? From memory I think we sold our interest in the law reseller last year for a profit. I will have a look when I get a moment. SB

Nothing remarkable from yesterday’s first investor inclusive AGM. Quite interesting that Guy said very little given his role as a co-founder and chairman. Bit of clarity on billings and revenue so more comfortable with the accounting treatment. Still not sure at what real point the 5 year plan came into being; but the clear statement was it is ahead of schedule and should see the company delivering actual annual revenue growth purely through its automated sales channels by 2021 – 5 years is a long time to get to that point but looks like we are there. The bulk of the Q+A queries came from me – and as anticipated were given a polite response. Some could have been handled better – we all know ntld stats is useful – but it doesn’t include .xxx, abultblocks etc and I don’t think it was unreasonable to ask the company to provide accurate data on its DUM’s breakdown. dds and budapest need sorting; poorly performing strings should be reviewed as to whether they can be improved – or culled; and I’m unclear as to who we continue to make significant partner payments to ($2.9m in 2019) – we only have three domains in partnership (country, london and review – the rest are wholly owned) and the bleed from london was addressed last year? As for the dividend – we generated £2.5m in cash in H1 2020 and spent $1.2m on buyback. Given our H2 weighting, its not unrealistic to assume we will generate $4m cash in H2 2020 (remember the importance of this to Toby and Michaels options?). We entered H2 2020 with $7.3m in cash – so by interim results in Sept it’s not unrealistic to assume we will have $8/9m in cash – more than enough to commence dividends. 0.1p interim dividend per share would cost $1.2m; with a full year dividend announced in March next year with the benefit of a further six months cash generation (Oct 20 – March 21). Good day for fit (+1100 – including single digits) and yoga (+700) – according to ntld…..SB

YHAL - just out of interest - how would you see a tender offer being funded? SB