Member Info for Silverblade

SS - it’s interesting that they are going down an auction route similar to the private single domain auctions which we used to pick up the majority of our portfolio. A pe of 10 is roughly what we paid for ICM – although clearly a larger number of domains in that transaction. Whether we bid or not is something which should be of interest to all of us. If we bid – we are going to need to raise some funds over above our current cash position – and that would likely involve a significant placing at a discount to the current market price (5p?), or moving into debt, and a delay in any dividend. If we don’t bid – it will be interesting to see what price is paid given its relevance to our own annuity-based cash flows.

I think the funding for the new hires came out of the savings made last year in relation to back end contract renegotiations, streamlining etc. The KPI appears to be to remain within the $6m for operating costs. One of the puzzles for me going into 2020 is the level of partner payments we make which appear very high – whether these now reduce after .london was settled I am not sure – and if not, who on earth are we making these payments to given all registry fees are covered under cost of sales. Law is the only string I can think of where this could be a problem.

I hope you and Huck are correct on H1 20202 and I’m just being pessimistic! SB

Now this is interesting. Probably looking for an all cash offer.

“ A partnership between Frank Schilling’s UNR and XYZ is auctioning off three domain name registries: .car, .cars and .auto.

The two companies partnered five years ago to bring the domain names to market. The three top level domains have generated combined revenues of more than $11 million so far and have a “predictable revenue stream of $1.7MM per year” with an average operating margin of 95%. “ source credited to domainnamewire.

Wonder if the team are running some valuation numbers. SB

Huck - for me - if we were able to increase sales between 5 and 10% in H1 2020 v H1 2019 imo that would be a very strong result given the circumstances. SB

It might have been part of the buyback...….. :-D SB

huckster - I think we are all pretty much focused on H1 2020 - I just thought it would be useful to see what we have to compare against. I do agree that there seems to be a lack of visible growth in registrations - lets hope the growth being referred to by Elliot Noss was not specific to .com. org, net, country codes etc and that gtld's were part of growth. I think we have seen some evidence of this in casa, london, fit, fashion, law amongst others. It would be nice to think the company was on a bit of a push in june to finish the half year. As you say, lets see........!!
Mickster - hard to disagree with your comments. There have been many opportunities to make decent returns in the past 8 weeks - and i am sure many investors have taken the opportunity to do so - possibly exiting positions in mmx - look at SJL's move into cash. Many of us here probably feel a combination of emotional attachment due to the length of holding (never good where investments are concerned) and total frustration that the fundemental business proposition/trading now appears to be delivering and yet there is an increasing issue with private investors confidence in the mmx management team specifically in relation to the share price disconnect. Toby has indicated the business is aware of this and of the need to improve investor sentiment - let's see if we can get any traction on this issue in the coming months where the company should be able to provide some decent trading updates and potential investor returns. SB

Even with the current 300K of deletes we are still significantly ahead of the number of domains we had at this point last year by almost 500k (H1 2019 = 1.8m: H1 2020 = 2.6m - 300k = 2.3m?) We know the business numbers for H1 2019 ($8.9m revenue incl. 68% renewals covering 97% of all costs; operating EBITDA of $2.7m; PBT of $1.7m (eps 0.19c); 1.82m registrations; and cash generated $2.2m). As indicated the main unknown is the amount of brokered activity which may have been impacted in the first half of the year, albeit this probably has a lower impact on H1 due to the higher weighting on H2 sales/renewals performance. If increased covid sales and adultblock can mitigate any reduction in brokered sales that may be a good outcome for the business.

Given where we are – the business may look to coordinate a trading update in mid-July with an AGM – which would provide the opportunity to provide some clarity on our current cash position and potential dividend payment/timetable.

Bakky – you mentioned social media last week – from what I can see there is little activity on the company’s online presence – however I suspect Christa’s role is more focused on developing domain portfolio branding and providing such to our registrars to assist sales efforts. SB

....great article on tlds on domain name wire. Some of the comments are also very interesting - especially the chat around data, use and take up. We should all be encouraged by this - we have a decent product range - and the market now appears to be getting some evidence based momentum. And .London had a great day too! SB

SS - one of the issues I discussed with Toby this week related to investor communications - including private investors such as those who post here. He is aware of our general concerns in this regard, and confirmed it was something that was being looked at. The company is due an AGM at some point in the near future and that might provide an opportunity to engage with shareholders on a digital platform making it more accessible. Like you I would like to see some type of distribution announced as soon as practical for the reasons in my earlier email today and reaffirming the business is on track. SB

Personally I never invested here for the dividend - I was after capital growth - and still am. However, I believe the introduction of a dividend is now essential to show the company is capable of making distributions to prove the business model - which will in turn lead to capital growth. We need to grow eps and make a decent payout. There are companies who effectively payout 100% of their earning's as dividend. Lets not kind ourselves that will happen here - but 2019 eps of 0.4p (0.51c) and share price of 6p gives a return of 6.6% on a full payout. A prudent business would ensure its earnings provide 2 x dividend cover - so last year 0.2p could have been paid out - 3%+ return. Grow eps, provide a decent dividend, and this will help the journey to an improved share price. SB

There's a caricature Huck - although perhaps not the one I see in the mirror.... not for a few decades anyway!.....and yes I caught up with Toby and your feedback reflected what we discussed. Toby had called following the email I sent earlier in the week when we thought a bit of coordinated action might be in order. To 2021 it is.....although like SS, bakky, norab, bonum, YHAL, Dandee (apologies if I missed anyone out) I sincerely hope there are plans afoot later on this year to inject some reasons to feel a bit better about our investment. SB

Good effort Huck and thanks for taking the time to post your updates. The most important issue for me in the short term was about reassurance – and I am ok with what has been reported back. The reason we are where we are as frustrated investors is because we were close to the point where the business was finally moving out of its own legacy shadow. The share price was creeping towards 10p, we were making real money, no debts, cash in bank, generating cash each month, decent renewals and sales growth, a bit of aduktblock ahead of schedule and about to introduce a dividend. It was all going in the right direction.
Then the covid whammo – and we have been unable to move on since. In the meantime – SJL sold his remaining 10% of the business and the majority was scooped up by long term II’s – that in itself should provide a big slice of confidence – can you imagine what would be happening if they were sellers? Both written updates (ok limited but they were there) and the verbal clarifications from Toby should provide us with some degree of comfort despite the share price disconnect. If we can navigate any bumps with our brokered sales; support the registrar network to continue demand for our gtlds (and the recent senior hires should be very focused on that); keep on doing the basics right; and take on face value the 5 year plan as alluded to by Toby as nearing the end of its implementation and the end position the company expects to be in – then there is certainly more upside here than currently recognised.
Its difficult to always be objective when your holdings are in the red – and most here have a long history with the business – but ask yourself the question – based on what you know about the business, the risk and rewards, and where it is in its development cycle – would you invest at these levels? Look at the actions of the II’s for the likely answer. SB

Huck - if you get a chance - are we going to have an AGM?; how is adultblock selling; are we performing in line with peers re covid; how does the company define shareholder value; when will finncap have access to full year forecasts; any chance of a trading update - i asked Toby this in an email earlier today. Sure Toby will be restricted what he can say - but to his credit at least he engages. That doesn’t make where we are any easier to accept though. SB

No response yet bakky, I have spoken to Toby in the past and he prefers that to putting things in writing which I can fully understand. Will let you know. I thought SJL would have been the blocker to any low value deal - but based on what happened shows how much I know! SB

SS - good idea - I reached out earlier today. Loss making, heavily in debt but on a huge acquisition and growth trajectory CNIC v no debt, real profits and slow but stable MMX. One stock loved, one in the doghouse....SB

Dandee - you might be right. That would be incredibly disappointing - I still hold out some hope but its getting very difficult to reconcile any faith I have in the business with the reality of being an investor.
Bakky - I had similar thoughts - the main thing that goes in our favour is I don't think our current II's are pure 'private equity' in the sense they want to run a business - rather they like being investors with some degree of influence on company decision making. That said, they cannot sit on multi million losses on their investments without a plan to realise some value - and clearly the coordinated purchasing action two weeks ago would lead you to believe there is activity in that regard. SB

In strangely bizarre timing, precisely one year ago our share price was 5.8p – still reeling from the after effects of a horrendous 2018 loss. To see the company back at 5.8p for me is truly shocking. To have a company valuation of just over £50m representing the c.£25m ICM purchase and our legacy business combined is quite unbelievable. MMX need to urgently provide a trading update to navigate away from what is a totally unacceptable position or we must accept management simply have no regard for any shareholder interest. SB

Evening all. Seems strange we used to have the counsel of Elliott Noss on our board - no offence to Toby who is a likeable person - but perhaps we lack the current gravitas of a senior level spokesperson who is recognised as driving the commercialisation of the domain industry. The longer our situation continues the more I wonder what our major shareholders plan is here - as I said earlier this week I think they are just playing a waiting game - and hope godaddy pick up the phone - surely no other option makes sense. As for deletes for vip and work which account for the vast majority of upcoming - we should not be concerned - they are well
within expected renewal rates and indeed ahead of similar gtlds. Boston is a basket case but has been from the outset because of the epik registrations. But as noted today and generally this week - the domain market is smashing it. Where are we? SB

What's now worrying me is did Finncap manage to place all SJL's shares - or are they now sitting on a pile of shares they need to get rid off. The largest 22m trade is still unaccounted for. That would be a major concern. Either that or we have a background seller at 6p or below. Either way not good. SB

Relentless selling at the moment - no support for the share price even at these levels. How can this be acceptable for any investor. SB

Good grief. SB