Member Info for Silverblade

Lol - For a minute there taps I thought you were looking on the bright side!! SB

Welcome back SJL - you man of mystery!! You have no doubt seen our musings over the past 10 days or so - sure it must have caused some amusement. Good to hear you are back in the buyers market. Can you comment at all on the .gay issue with any thoughts? SB

From what I can see the domain was settled by private auction. Where domains cannot be agreed privately an "ICANN facilitated auction is a last resort for resolving string contention sets", with Icann controlling the bidding process and receiving the funds. .gay is listed as resolved but with no details on the auction proceeds - unlike other domains such as .app which was a last resort auction with icann making public the final purchase price - $25m in the case of .app. So no details - means a private deal between bidders. At what price though!! IMO SB

I guess to some extent this will depend on what type of income mmx receives, but given the current state of the share price I think this type of news is worthy of an RNS - if we sold $1m of domains that would be quite material - and would likely result in market worth news? Anyone know how we can find out what Top Level Design llc paid? SB

.gay has been resolved. See link which believes mmx will benefit from private auction income - 3 way split could generate some decent cash. Just leaves .music as an opportunity to secure or benefit from future auction income. I don't know if .gay domain is in any way linked to SJL's recent comments - given the possible .gay link to adult content and mmx's adult portfolio - possibly the company reached out to SJL to understand the purchase prices for ICM's portfolio and a bidding strategy? SB

http://domainincite.com/

The only issue I can see in this area would be SJL's new business - a blockchain enabled age verification business to address the requirement for individuals to prove they are 18 or over to access adult web sites. That said - I think this is currently UK only - not sure this type of approach would be go down well in the US. SB

https://avsecure.com/

I was having a think about my ‘insiders’ post from yesterday (12th Feb) – where I indicated a corporate ‘insider’ is defined as someone who owns 10% of a company; or who is privy to non public information. SJL certainly falls into the first category. However, that alone would not preclude him from making share purchases (or sales – although this may require a market notification under US legislation due to his 10%).

As far as I am aware we are not in a closed period either. So, the puzzle for me is - why would SJL say he “certainly cant buy (or sell) any shares” based on his ‘insider’ status – because whilst a 10% shareholding clearly puts him in the ‘insider’ category, I don’t see why that would restrict him from making share purchases as an outside private investor. SJL also referred to himself as an ‘insider’ on no less than 4 occasions. Maybe there’s something afoot after all and SJL is an 'insider' under both market definitions. SB

The position on share options for Toby and Michael is as follows.

2016 AWARD – 7.5m nil cost shares each – exercise price 8p, full vesting 16p (i.e. 100% increase from price at point of award) – based on average 20-day price prior to publication of accounts to 31 Dec 2018. Share price needs to be over 8p for vesting condition to be met – so at 8.1p that gives them just over £600K, at 16p its £1.2m.

2017 AWARD – 3M nil cost shares each – exercise price 9.375p, full vesting 18.75p – based on average 20-day price prior to publication of accounts to 31 Dec 2019 - so at 9.4p that gives them just over £280K, at 18.75p its £560k.

2018 AWARD – 5m nil cost shares each – exercise price 7p, full vesting 14p – based on average 20-day price prior to publication of accounts to 31 Dec 2020. Share price needs to be over 7p for vesting condition to be met – so at 7.1p that gives them just over £350K, at 14p its £700K.

In the case of a change of control i.e. a sale, the vesting conditions would apply early.

As pointed out Toby has purchased 500K shares and Michael has purchased 1.925m.

So both Toby and Michael are heavily incentivised to ensure a share price way in excess of where we are by whatever means available to them. In the case of the 2016 Award options – something would need to happen before the end of April for these to have any value – 8 weeks away……SB

I didn't say he made himself an insider - whether he is self regulating to comply with the rules or has been advised by the company is not the point. What is clear is that factually he is an insider due to this 10%+ shareholding - anything else is just conjecture at this point. SB

My thoughts. There are two reasons a person may be regarded as an ‘insider’. The first reason is being privy to price sensitive information. As a PI with no involvement in the company other than beings its largest shareholder he will not see any non-public information which would put him into this classification. The second reason is where an individual holds more than 10% of a company’s shares – in the case of SJL he recently went from 6.12% to 15.92% following the deferred shares issue. I suspect it is this second reason under which he now considers himself an ‘insider’. I like to think there may be more here and there is some corporate activity; time will tell - the share price will likely be the first to react if there was anything happening. SB

Bakky of course I agree - but we at talking about two issues here. Firstly, and as you point out, the business needs to ensure our registrars are being supported to sell our portfolio - through targeted marketing campaigns if necessary (for both existing domains and new products such as luxe). I don't imagine our sales staff are 'front line' - that was one of the early changes Toby made to work in partnership with the registrar community. The exception would be the premium sales team - perhaps this is an area which could be subject to further visibility on the cost v business return. But as has been pointed out by me and others recently - the focus is not just on the domain numbers but the revenue per domain. The second issue is what we are talking about today - which is the type of corporate support a share needs to reassure investors in uncertain times by creating a liquid trading market, avoiding a news 'void' (and I fully appreciate we had the trading statement recently - and it was encouraging yet look at the reaction; and the London investor event last year) - so to me there are times when company actions speak louder than words - but I guess as a PI who is frustrated with where we are I would say that!! SB

Gents - I'm 50/50 on the good and bad of buybacks - I appreciate they may be used for ulterior motives - but in this case when the price is so low we need to use any levers to introduce some positivity hence the suggestion that it is something the company might consider on a small scale. We need to stop the decline and I'm open minded to the means as long as it puts a hold on the constant decline. In the meantime I have made some purchases today - fortune favours the brave.....SB

The sale of low volumes of shares continues to have a disproportionate impact on the share price. In the last two weeks roughly 2m shares have been traded - £120K or so - wiping out £10m from the company valuation. I am at a loss as to the motivation for sellers at these levels - other than they are PI's who are witnessing a downward spiral and have lost confidence at this time. I am not a huge fan of companies issuing statements at times like these - the market is what it is - but I would fully support some action to address what is now clearly a significant issue with the market valuation. I take some comfort that our II's are not selling, but they must be required to address the issue in their internal reporting on asset valuations and there must be some difficult conversations in the background. We have cash in the bank - possibly now is the time for a limited share buy back - £1m buys almost 20m share's (this would make sense to increase eps irrespective of the need to create a buyers market). Or accelerate the introduction of a dividend. Or get us off AIM. Or use our financial advisers to put some accurate forecasts in the market. The market needs some reassurance - me included.....SB

It will be very interesting to note how .work performs in the next 3/6 months - we have sold 350,000+ plus domains in the last 12 months - so as noted the renewal rate will be an important gauge on H1 2019 income generation/growth. Epik registrar domains will continue to be a short term drag - if boston geo is anything to go by there may be some hurt coming the way of .London - next month may be a bit sensitive give the volume of (likely) epic London registration last Dec/Jan. SB

I thought it a bit strange that the RNS included confirmation that .cpa had been resolved - with an inference it had raised a decent amount (up to $1m? via private auction ). Given that would have equated to 200,000 domains at $5, that type of info might have been more useful as a separate release. However, now that .cpa is out the way - we are now left in the hunt for .hotel and .gay. I can't seem to find any info on when these will be resolved but with .cpa progressing perhaps they will move soon, although I think there was a community issue with .gay. I guess the question is - are we in it to win it or hoping they both resolve to private auctions and we get some cash. SB

The company is targeting all its costs to be covered by renewal revenue and will probably be at that cross over in 2019. We need sales momentum to improve the bottom line. The company stated last year it will introduce a progressive dividend policy - we are generating real cash from operations, have $11m in the bank, and a likely EBITDA this year of $6/7m. Yes we have increased liabilities but there is no reason some form of distributions cannot be started later this year. IMO SB

If I was TH (and Michael) I would be 100% focused on maximising the share price in April/May this year; as a minimum they need over 8p a share. SB

Namescon needs to be attended and being part of panels and discussions are good for company visibility - but a corporate sunshine jolly wont have any impact on our share price - and that's what needs attention. SB

Latest from finnCap. The frustration for me here is - and bear in mind we only have one broker - I expect them to both be accurate in their reporting and remove some of the guesswork. Their market cap is incorrect (presumably based on the shares in circulation pre ICM completion shares being issued in January 2019) and results are normally published in April not March. Who knows what numbers they are using to calculate Enterprise Value. Also - there is no point providing a target price of 17p without any substantiation - 3 times the current share price. This criticism goes both ways - mmx need to provide accurate trading guidance and liaise with their broker. We need credibility and accuracy and this is just not good enough guys. I will email investor relations. SB

Minds + Machines (MMX) : Corp

ICM and channel sales see results beat expectation

Key data
•Share price (p) 5.7
•Target price (p) 17.0
•Market cap (£m) 45.4
•Enterprise value (£m) 39.8

Boosted by the strategic acquisition of ICM, FY 2018 has been a year of growth, so both revenue and earnings will be ahead of expectations. Q4 sales, notably through the registrars, are helping to transform MMX into a “stable, growing, cash generative business built around organic growth, innovation and accretive acquisitions”. The momentum has continued into 2019 supported by ICM, which is delivering to plan. We nudge up our FY 2018 forecasts in response and will take a view on 2019 with the FY 2018 results published in March.

I think the $3.4m is referring to renewals revenue only given the context of the paragraph? Full ICM revenue would be more. The update didn’t really give us anything new - but at least it didn’t post anything grim either. SB