Member Info for Silverblade

Take off the $200 per domain bit of Franks valuation and that’s where we are. Probably a bit less. Not pretty....SB

Blimey bakky - you must been here since 2008/2009. The IPO was priced at 4p in 2007 but the price fell below that in the following two years. Since then, the share price has only been under 6p on three occasions - the first two for short time periods before the company started making $$$ from auctions - but spending as much on daft ideas and building an empire with nothing to do. Since the 2018 review we have never really recovered. I always though there was great potential in the gtld space - I guess we all did - and maybe there still is. Although the company is 13 years old, its main domain activity has only really been building since 2013/20414; and since then we have had to deal with ousting the two founders, Weil's mischief making, SJL's impact and phased withdrawal - and that's not even going near the legacy operational issues which have had to be dealt with. Its good you are not as exposed as you used to be - I do not like the position I have found myself in with the amount of capital I have tied up here. And likely all others are similar - as noted there have been few periods to buy below 6p and the returns limited. I had high hopes for 2020. It could still be good - but the company needs to pay heed to talking about shareholder value and failing to deliver. SB

SS - its been a 13 year journey so far for the company - and I've been here for more than half of it - an expensive half I can assure you....SB

SS - don't disagree at all - my point relates to the position where our own broker made the following statement in late March 20 " Given the current global COVID-19 scenario, there is significant uncertainty in the global economic outlook and the company feels unable to provide reliable guidance at this stage. However, as an online business MMX is not particularly exposed, and indeed the movement of work and society online could well lead to a spike in demand for domains. " So - for me - this needs addressing both in terms of guidance and clarifying covid impact - which as you note may lead to an earlier confirmation of any dividend which may encourage share price movement which I think is the critical area we need to see progression on. SB

I guess the only downside of the recent buying and selling at 6p is the perception given that price reflects what the company is worth, and in the absence of any guidance whatsoever its difficult to counter that argument. There is no personal incentive from the current management team to increase the share price because they simply don't benefit to any real degree - and perversely keeping the share price low will allow a low conversion price for this years option awards. SB

Totally agree SS and Huck. Now is the time for an update - what better timing to align with the support shown by the recent purchases than to provide some clarity on 2020 to date and where we are going. The only negative for me on the SJL exit was the missed opportunity for our directors to make a statement similar to the II's by making some purchases - disappointing (I can guess your response already bakky….). Each month we add a bit more to our cash in bank, grow our revenue and maintain overheads within guidance (although I think we would rather see them cut). If a sale is less likely for now - grow eps and commit to a payout with some proper guidance not this progressive rubbish - we should be paying out minimum 50% of profit and running a lean business - I cannot believe these issues were not put to finncap as part of finalising the II deals last week. SB

For the first time I can remember we have seen multiple purchases by existing II’s and the buyback – accepting the situation was as a result of SJL exit but certainly not forced purchases imo. mmx took out 15.9m and cancelled; Lombard purchased 8.6m and now hold 128m (14.2%); Cancord/Hargreave purchased 27.5m and now hold 99m (11%); Oryx purchased 16m and now hold 69m (7.7%). We know Lombard and L+C are general active purchasers – but Hargreave and Oryx have not been purchasers for some time – Oryx last bought 20m in 2015 at c.8p. Of all our shareholders (outside of Guy Elliott’s director holdings) – L+C are our longest investor – and probably participated in the IPO back in 2007. What is clear is that the majority of our II’s will be showing a loss on their current investment in mmx – and have progressed what we are generally advised not to do in such circumstances – they have averaged down. I’m taking this as a positive – and will be really interested to see if L+C or Hony pick up the unaccounted 22m – or whether there is another investor active in the business now. SB

Scotty - the CG notification was in relation to Hargreaves increased percentage shareholding based on 908m shares as opposed to any further purchase post yesterday’s RNS. We did get a holdings announcement from Oryx who picked up 16m - and they not been a buyer in a long time. Just leaves the 22m purchase unaccounted. SB

Hargreave picked up 27.5m shares to take their holding to 99m. Probably SJLs first 7.5m and then a further 20m on the 1st. By my reckoning just leaves us to find who took the 22m and 15m purchases. Does appear existing investors are buyers - let’s see if L+C grabbed some as well given they are historic buyers at this price. Lots of shares in II ownership now. SB

Interesting position we are now in. L+C own just over 16%. Lombard Odier just over 14%. Collectively 30%+. Acting in concert this would be sufficient to make an offer for the business. I don't actually think either would be interested in a purchase and am not suggesting that is their motive - but its certainly a way for others should there be an interest in what we all believe is an undervalued asset. SB

bakky - mmx aside - the remaining 4 large purchases on the 1st and the 7.5m the day before may or may not have been sold to new investors and therefore would not have breached the initial 3% threshold - hence the 'perhaps' comment....it will be interesting to see if L+C and Lombard made any purchases. And agree on the business value - merely if I was told a shed load of shares were available from the company's largest private shareholder who was selling up I would engage in as much diligence as possible with the company's broker before making the purchase - that's all. SB

bakky - perhaps all the shares were sold to new investors - even the largest purchase at 22m is still less than the 3% notification. I'm not saying they were not aware of mmx - but if you were about to make a £1m+ purchase either as an individual or fund - would you not ask the company's broker for a current trading year update - esp bearing in mind covid - and likely earnings? And if the response was "no idea" - would you still invest? SB

Reflections

For what it’s worth, my take….

1. SJL. I’m disappointed SJL is no longer a shareholder here. I have no issue with his motive – but I took comfort from his involvement here both because of his knowledge and contacts in the domains business and because his shareholding commanded a degree of recognition from the business and perhaps opened lines of communication not available to smaller investors (that said – Toby has always been available whenever posters have reached out). It was good to have his thoughts – but I also suspect the reality is SJL’s ‘exit’ was two years ago when he sold ICM – and he has been very open about his decision-making process with mmx and his wider interests up to last week’s selling. So thanks SJL for your reasoned and supportive input over the last two years – and for the strong business which is now a core part of the mmx portfolio.

2. VIP. As noted – looks like lots of deletes on the way – but I have always found it hard to judge .vip. I think we paid £3m for the domain – and I’m not entirely sure if we really understood its Chinese value at the time of purchase – or perhaps we did and no one else saw it. It’s certainly our largest seller – but what revenue does it bring in – purchase and renewal? $2? $3? Given the 1m + domains that makes a big difference. If you were to rank .vip in ‘value’ terms – where does it sit in our portfolio – 2nd (after .xxx)? I guess we perhaps will never know because we do not have that breakdown. I do think of all our purchases. vip was a good one – whether by strategy or good fortune.

3. Buyback. The buyback continues to paint a confusing picture for shareholders. Not a single purchase for six months, 5.8m lying in treasury, a capped £1m fund, then bang 16m at 6p all cancelled with another injected £0.5m in the fund (£1.5m in total with about £200K remaining after Friday). Why the change – given the previous comments on delaying dividends because of covid – we elected to spend the best part of £1m which appears to be a direct response to SJL’s selling. It looks opportunistic – liquidity of this scale doesn’t happen often, so we have to assume finncap called the company and got the OK. The reality is we have now spent £1.2m, purchased almost 23m shares – but the scale at less than 2.5% of outstanding shares is so marginal it has had no impact on share price, eps or market value. To put it in context – the company issued almost 29m share options last year – so we are not even close to having purchased what was provided in medium term incentives (they vest in less than 2 years).

4. Where next. We are in the ridiculous position of being on the verge of slipping under 6p again. We should take some comfort that 70m+ shares look like they found their way into longer term investors last week – what I want to know is what did finncap tell them to make them buy – because that’s the type of information which should be shared with all investors. SB

I wouldn’t rule anything out - couple of years back there was a heap of shares traded by a fund - Janus from memory - and it was to do with the wider portfolio. The same could apply to companies who no longer support AIM - let’s wait and see - shouldn’t be too long!!SB

Huck - what on Earth did you and Toby talk about!!!

Let’s wait and hear if SJL has bailed. That would be disappointing - but the reality is there are opportunities in the market we are missing out on - and sometimes it takes a brave decision to call time on a poor investment - and unfortunately that’s what mmx is at present. SB

There’s only three parties who could be involved. The 82m trade almost equals the other 5 combined - could be a negotiated sale and exit for SJL or part exit for others. SB

Wtf? I only stepped out to pick up a new kitten for the kids and come back to this. Wonder who’s at the table playing now / and who has had enough. SB

Huck - I am not making this personal - and I am not laying the blame for this at Toby's door. We have a Board of Directors, an independent chair, large institutional shareholders and SJL as our largest private shareholder. Even as a business with a market capitalisation of £57m there is a lack of accountability for where we are - words are meaningless without actions to support them. As it stands - most here are waiting on someone picking up the phone and making an offer for the business - lets say 12/13p+ and most would grab it - I would. Based on all our thoughts it does appear that the company's strategy as well. That's where we were two years when it hit the fan and our finances were clearly a total mess. Two years on - and a business model which appears to work - we are all (mostly) getting more and more frustrated with the lack of any return on our capital for a long time. I don't think Toby will be able to reassure you any more than the party line - we are profitable, innovative, growing, covid is minimal, things are ok, we haven't found anymore crap (but the market is still wary we will ...) we'll introduce a 0.15p divided later this year, look at the sector and eventually someone will think we are a good fit.... etc. What else can he say? SB

Never mind two years ago - we were getting pretty close to double figures (and I appreciate that's not exactly fantastic but at least its something) and then bang - covid, no dividend and silence thereafter. For all the rhetoric about shareholder value; the "Board remains acutely conscious of the need for shareholder return" - but does nothing about it. When is a buyback not a buyback....where's our AGM, is Covid having an impact (if nothing great and tell us; if there is - offer to share some of the pain), director share purchases (I know - but fgs if they don't see value now then when), how many adultblock did we sell in Q1, is there anything else in the pipeline, what are .dds and .Budapest up to. I could go on but you get my point. As for yesterday - looks line someone sold 7.5m and someone bought 7.5 as a negotiated trade? As for updates - L+C are now holding 16% and our web site hasn't even been updated. What are our directors up to? What's the role of our independent director? Our broker who seems to know nothing about our current year performance. Our financial communications consultancy who seem to do nothing our the business. And before anyone comments - I know this will comes across as pessimism and not exactly encouraging - but its because we finally seems to have the makings of a decent business after so many 'almost' years and yet there is continued frustration and disappointment here for now. SB

....trades throughout the day - esp the 4pm trio. 15m - not buyback. Let’s see if we get a holdings RNS to show who is selling or buying - and hope they are not all sells as might appear.....SB