Member Info for Silverblade

So many questions SS which are becoming increasingly relevant. I had a look back at the results - 21 people in the team excluding directors - total wage bill $2.4m - so pretty high average probably skewed by a few higher earners (senior management). Toby and Michaels director salary’s of c.$400k each plus the $1.2m share based expense largely on their behalf added another $2m - and probably a bonus on top. Not a bad life eh....SB

Cheers Huck. Never mind an EGM - what about an AGM - which was due six weeks after the results in late March! Not that much is usually progressed at such events - but having one would be a good excuse for an update, future strategy, current trading/covid, innovation, buyback etc. We live in hope! SB

You are of course correct bakky. 6 weeks working from home and I’m clearly losing the plot!! Cheers, SB

*unpalatable. Doh! SB

You have to think our larger shareholders are looking at consolidation as the only way to recover and hopefully increase their ROI - dividends are not going to cut it based on current indications. We don’t have enough cash for a meaningful tender offer and the price of such an offer is unlikely to be palatable to most. Looks like it’s a waiting game. Unless we go on the front foot and raise some cash for acquisitions. Standing still is the least preferred option imo. SB

If they let the price drop below 6p - and we are as close to that as it can get with the relentless small volume trades - that would be very disappointing without some response to bolster sentiment (fundamentals clearly don't work) - particularly with the level of investments made at that price only last week. SB

According to the company, the Q1 senior ‘sales’ appointments have clear remits. Ben Anderson (COO) is responsible for platform management and product development strategy as it relates to the innovation programme (let’s assume this means adultblock given blockchain is not exactly showing any signs of material progress). Vaughn Liley (Chief Revenue Officer) is responsible for driving growth through the registrar channel. Admittedly they have started during interesting times – but there is evidence the domain industry is not only coping but growing in covid times – so there is no reason to think these highly capable individuals should not be adding considerable value.

On the basis we might not hear anything until a trading statement in July 20 (lets hope there is some communication prior to that) – we will be able to make a clear judgment on H1 2020 v H1 2019 trading as a combined business for the first time. H1 2019 = $8.9m revenue (68% renewals covering 97% of all costs); operating EBITDA of $2.7m; PBT of $1.7m (eps 0.19c); 1.82m registrations; cash generated $2.2m.

The question is - what would represent acceptable progress? SB

Interesting article on domainwire (full credit to writer for analysis) – confirms what we already know in relation to mmx v general market share price performance.

1. Verisign is up 10% for the year and is down just 2% from its high earlier this year.

2. Tucows dropped 16% from their peak on January 16 and are down 10% on the year. Price has rebounded 18% from the immediate covid 19 impact in March 2020.

3. GoDaddy is up 37% since March 2020 drop and are up 11% on the year. They are down just 4% from their 2020 high.

4. Endurance shares are down 48% on the year and 53% from their 2020 high but are up 7% from March 2020.

5. CentralNic are now even for the year and off just 4% from their high at the beginning of the year – up 27% since March 2020.

6. MMX fell 26% from its peak on February 7. It’s down 8% on the year and down 1% since March 2020.

7. NameSilo registrar is down 54% since January 9. The stock is down 50% on the year and has dropped a further 9% since March 2020.

So out of the 7 reported – 5 are moving in the right direction, and 2 are not. Sadly, we are in the latter category, and still nothing from the company to reassure investors. SB

Looks like the missing data is coming back on stream for all our domains. Lots of totally random historic .xxx registrations - even saw icm.xxx in there!!! Frustrating we can't find a way to see adultblock registrations. SB

There were no gains reported in any mmx domains today so suspect the DNS reporting is still screwed up. SB

I like to think shareholders like Oryx, hopefully supported by Lombard and L+C, can make representation to the board for an improvement in communication and business strategy to address some of the valid shareholder value concerns we and presumably they have as well. I would support activist shareholder activity where it was done in an appropriate, non-confrontational approach in the first instance i.e. not where Harwood and Fulcrum have got themselves. That said, Oryx bought their main 50m shareholding in autumn 2015 and January/February 2016 was when AVC got ousted and TH got the reins. Maybe more to this than meets the eye. I still think Guy Elliott has significant influence here - and is probably the only one who is in real profit on his shareholding. SB

Orxy bought the majority of their previous shareholding at 8p – 50m shares (they had c.2m previously). Their recent purchase was 16m at 6p. Their total outlay for their 69m shares is likely to be about £5m – so about 7.25p average. SB

Bakky - Oryx have clearly been a shareholder for a long time and have not pursued an activist agenda so no reason to think otherwise - but with 70m shares they cannot be ignored. I think they make it clear they are looking for market value appreciation - I think its a positive they have taken more shares here - and if that puts a bit of pressure on the team to focus more on shareholder requirements then about time. SB

We know that Oryx International purchased 16m of SJL’s previous holding and now hold 69m (7.7%) - and that Oryx last bought 20m in 2015 at c.8p
Oryx invests in “ small and mid-size quoted and unquoted companies” and “targets companies that have fundamentally strong business models, but where there may be specific factors which are constraining the maximisation or realisation of shareholder value, which may be realised through the pursuit of an activist shareholder agenda by the Investment Manager.”
Oryx’s Investment Manager is Harwood Capital – who as per the activist comments above are currently actively taking on the management team of Fulcrum Utility Services in the belief management are not making decisions in the best interests of shareholders (Incl offers to purchase the business) – to the extent they are seeking to purchase enough shares to entitle them to appoint board members – and taking advantage of the company’s current low share price.
Interestingly – Oryx claim that dividend income is a secondary consideration when making investment decisions – and the business has “ benefited from three takeovers in recent months and there are several catalysts in the portfolio that we expect to contribute to underlying growth in the NAV of the Company in the current financial year.”
The primary motive for Oryx’s investment is clear –maximising/realising shareholder value – the question is do they intend to remain passive and wait on this happening or do they pursue an activist shareholder agenda. SB

It’s funny because when I was looking at godaddy regs, xxx was coming in at 32k but I put it down to what is registered and what is defensive - looks like it was the glitch! Off to see what Boris has to say about it all now...SB

Even we’re not that unlucky bakky!! The site was hacked for data and they have shut down some of their servers until they can get a handle on it. SB

Not that this should come as any surprise given their dominant market position, but Godaddy are a top three registrar in all our domains outside Germany (NRW and Bayern), luxe and Chinese shopping. In total over 300K domains as registrar – excl .xxx which I can’t find the breakdown on for its 100K portfolio – and they actively promote all adult domains (No 2 registrar in porn, adult and sex) so clearly have no issue with that from a content perspective. This goes against some views in the market they are not into ntlds, and if they were looking to expand their Godaddy Registry business and secure the majority of domain income as both registrar, registry and ultimate asset owner – then there is a clear strategic ‘fit’ with mmx.

We are 7 weeks away from completing H1 2020. Would be good to get some indication on how we performing – as per this morning comments – surely we are aligned with our peers? SB

From domain name wire

“ Tucows: Domain registrations are way up during pandemic”.

Jeepers. Looks like covid is having a significant impact after all. A very positive impact. SB

Ah sorry - I though you meant how are we currently valued in comparison. In terms of actual sale value - no timescales clearly - in real general terms I think it is all about the average revenue per domain in the portfolio multiplied by an average ‘life’. So if our average is about 8 dollars revenue per domain and a buyer thought they could get a decent life - say 10 years - then you get some decent valuation numbers. But I don’t know if it’s as basic as that - or whether it’s probably more important to look at core earnings ie ebitda, eps and PBT? 10/12 times ebitda with overhead stripped out sees decent numbers as well - certainly beyond 10p a share. I can’t imagine the IIs would be happy at those levels after all this time. All surmising anyway - back to the 6.03 reality tomorrow! SB

Not very scientific - £60m market cap = $75m / 2.5m domains = $30 per domain. Doesn’t make it sound any better when I write it down....SB