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Hey Chaps ,
Sorry for the extended radio silence .
unfortunately , i was out of the loop for a good few months towards the back end of the year with some non covid health issues . Seem to be on the mend somewhat now which is a relief .
I did make some informal overtures to the BOD regarding the possible RTO of the shell by the regulated digital payments company i am involved in in the UK but there didn’t seem to be much appetite so it never progressed .
i am supportive of the tender offer and took up the offer at 10.4 p and tend to agree with Silverblade that the final private company payout may be circa 11p if things play out as they seem to be .
i think and this is only an assumption that the BOD probably felt the company had too many potential contingent liabilities that may have come out of the woodwork in the event of an RTO and the incoming vehicles attornies would never be able to get past that .
that is pure speculation on my part i must add .
the eventual outcome wasn’t what we all hoped for but also wasn’t as bad as it could have been .
for the other ICM holders who had not sold any shares , unlike myself , they went into this deal at circa 8.3p and can out circa 10p so a “ win “ of sorts for them .
i probably broke even on the trade myself ( haven’t done the exact math ) .
i think the domain business is no longer any kind of growth business so the outcome is for the best and was really that reason that we decided to exit in 2018 .
I have to say i have utmost respect for the remaining BOD and believe they have acted , as they should, will a level of integrity and professionalism that can sometimes be sorely missing and i wish them the best as i also do to the rest of you on this Board. almost all of you gave me a fair hearing and many of you had some good insightful views .
who knows our paths may cross again if we ever bring the payments company to market in the UK !
my best regards to all
SJL
imho ,
having gone through a sale and purchase agreement with mmx , i think it’s safe to say there will be no walk away of a higher bid comes in . i would suggest the only chances of failure would be if icann refused permission ( zero chance) or some wrangle with the chinese regulator over approvals which again i see as unlikely given that those TLds are already approved in china , godaddy’s status as a multi billion dollar US public company and i’m sure some of the TLds already in the GD stable are already approved in china so isn’t like they don’t know who godaddy is .
there may be the odd chance of a wrinkle on some of the partner / geo names that need extra permissions but that’s a negotiation which i am sure has been figured in and a “ throw away “ number for each TLD agreed if one or two small ones fall out .
i too hope that the great release and general trading goes well as every penny earned pre closing gets kept by MMX so enhances our value .
i think the gap in SP to the ultimate deal value is normal and allows those to get out now to do so with an attractive arbitrage for others .
i have some interesting ideas for the shell post closing so is probably best i stop posting here for awhile to avoid any suggestion of conflict of interest etc . should
any of my ideas be taken up .
for the record i will vote yes at the AGM and intend to stay invested with 5% of the equity for the full duration .
as the great vinnie Jones said in the movie “ it’s been emotional “ .
all the best to you and perhaps see many of you on the other side :-)
BB,
probably a bit of both as far as L&C are concerned.
with the trend for SPACs right now trading at well over the cash value of the shells it really doesn’t take much imagination to believe that it would be possible to ride that wave .
Lots and lots of decent opportunities i am sure in market areas that could give a nice pop .
L and C may have more insight on the scale of the proposed initial cash return so can probably to their calculation of ( let’s say is 6.5p) , buying at 7.5 , getting 6.5 p “ soon “ and the the rate of return on the remaining 1p up to 2.3p if it turns out to be only 8.8p.
so really if u look at it that way is a pretty smart course of action .
erntit,
thanks fir your comment although i got a little lost on the sort of conspiracy ramblings .
Godaddy weren’t in the registry business at all 3 years ago : they then bought Neustar and the ex neustar management are still running that division it appears .
the offer is NOT nett $100MM , it is actually $120MM plus the company has almost $10MM cash , so is in the $125-130 area .
the reason it netts down , i suspect , is because MMx has to , as I understand it , pay some of the booty to its “ partners “ on the partner based deals like .law to effectively buy them out of their revenue share agreements so the underlying asset can pass to GoDaddy unfettered .
these partner deals impair the full value of the corresponding TLDs so any deal to sell the company or assets would have to factor that in . in truth i think the meat of the amount will be on .law which was an “ expensive “ TLD to acquire and the “ partner “ put up most of the money to get it at the time .
i personally am going to vote for this as i am convinced the cash shell has a lot of value enhancement possibilities over and above the residual value of what’s left of the 8.8p so i think hanging on and taking the payout will ultimately lead to a much healthier return . i would suspect L&C who bought a bunch of shares lost announcement think so too .
kitekat ,
i think it’s pretty fair to say that by and large a cash shell is worth nite than simply the cash in it , so it would seem sensible to increase shareholder value by taking that route .
“ move on “ means what exactly ? return all the cash and wind the company up ?
again BB i do not disagree with your assessment .
GD have come in and paid a good price for the assets in their current state with the “ analysis “ of what may be made of them and what potential windfall AB may or may not make .
imho not worth any more ( nor perhaps much less ) in their current state than the agreed price .
the price will have a small premium in it as the market is active at the moment with other potential bidders around . the other alternative was to institute all the changes and price increases envisioned and wait at least 6-12 months to see how that played out and how AB fared at the SRB anniversary : get it all right and a following wind may have made these same assets worth $150-180 M ??
get it wrong and #fail and perhaps still “ only “ $120 MM and at that time who knows how the consolidation market is playing out at that point in time ? frothier or taken a turn for the worse .
so all in all , given that an exit was on the cards anyways i am quite ok with them taking a decent slug of cash now to remove all uncertainty .
BB ,
i don’t disagree with your sentiment .
the other shoe to drop here i think vis a vis ultimate shareholder value will be any bump in SP post distribution on announcement of the RTO of the shell .
Don’t rule that out and i even have a few ideas myself to make that sing ...
BB ,
i think we DO retain the cash reserves mainly : just a small working capital requirements and any customer deposits not counted in that . which is normal .
the $12 M escrow is just a temporary thing to ensure we honor our obligations under the deal .
i guess the basic idea is for example to return 6.5p a share to each holder , who then has 6.5p cash plus STIlLL has their shares which may be worth say 3 p , BUT then when they announce a nice sexy reverse target / deal the shares increase to say 6.5p on the news so overall the holder has had 13p of value .
that’s how it’s supposed to work in an ideal world .
i will hold , looking /expecting something similar : the market is quite hot right now with plenty of target companies desirous off a) the cash and b) the listing
DKB,
lots of opportunities for sure and no shortage of options .
cannabis one
finntech another
with $100+ MM cash and the listing could be quite the hot ticket
i’m sticking around for the ride
Molehill ,
aye with the 5-2 at chelsea and now this April off to a cracking start .
I will be off back down the car dealership again soon at this rate . have one new slot available having just had another car lift added :-)
having looked at the rns and studied the ceos comments i think the overall deal is about right and TF deserves credit for landing it now .
if you recall my spreadsheet of the tld asset prices i often referred to in my posts i said that fire sale was $95 MM and “ fair value “ was circa $130-135M . i believe this deal represents that close enough .
the comment about the industry being a low single digit organic growth business is correct so rather than roll the dice and pull out a box of tricks to reshape the portfolio and pricing etx with an uncertain outcome to simply perform the same end game at perhaps a higher price later , just seize a fair price today from a big player and let them do all the work .
i support the deal and think is a decent one taking in all variables and factors .
bird in the hand and all that .
will try and catch a few extra winks now .
my guess would be to return perhaps $80MM or so to shareholders and then look around for a sexy deal for the cash shell ( a quasi SPAC i guess ). could be an exciting ride
silver ,
using my usual back of fag packet calculator i reckon the transaction costs come in over $20 million.
i reckon a good chunk of that may be to “ buyout / payoff “ the so called partners in deals like .law/ .miami and others plus perhaps includes the bonuses for Tf /BD and others .
a hefty sum but not unexpected
my math could , of course be way off .
correction :
i think is all TLDS
still a great deal
the 28 non adult tlds to godaddy for $120 MM
not including the adults .
this is a good deal
i think AB sales will still be modest until the H2 10 year anniversary of the original SRB blocks , which was september 2011.
re TF : this is really his first CEO experience and esp with MMX being a public co , he is likely taking his cues from the Chair and other non execs and we know
how little they like to communicate so more
of what we are used to there i’m afraid .
in truth the exit price ( not the day to day trading price ) will be based on the numbers alone and no spin or PR so as long as TF delivers there we will be fine ..
how funny would it be if they suprize us with the long promised inaugural dividend , only 3 years late :-)
enjoy your easter chaps .
have no idea where all of those asterisks came from
was trying to type “ share for ************** “ ..
and finally one further point .
without a shadow of a doubt TF will be trying to orchestrate an exit at an acceptable price in the shortest space of time possible .
we haven’t seen his share option package yet but it should be one that gives him a windfall of possibly $1-2M USD on achieving a suitable exit .
i would vote FOR that and would see it as appropriate .
Tony can get a job with a decent salary in many companies but his entrepreneurial tendencies will be leading him more to execute a lucrative pay day based on a good exit and move on to something else , rather than try to lock in for a longer run to enjoy the salary and benefits package which i think in truth was part of the MO of the last crew .
again all just my suppositions and 2 cents
BB ,
to answer your points in turn .
Ben Crawford is and has been on the phone basically to everyone for the last 5 years . it is undoubted that conversations have been had at some point .
there may have been some envy/ competitiveness between TH and Crawford but that wouldn’t apply to TF .
despite their better than MMx performance in the last 3 years , when we spoke with them SP was circa 60 , now 85/90 some 3 years later , i for one am not a fan of their strategy and apparent destruction of value in some of the companies they have acquired these last 5 years .
the problem with a deal with them is that it is almost impossible they could raise the whole
purchase price in cash so would be some element of share for ************** which then puts the fate of our eventual exit in someone else hands .
you can see how that game plan worked out for ICM with MMX in 2018 ! take 1/3 cash and hope for some uplift in SP and a chance to exit .
i for one wouldn’t support such a move unless a) the sticker price was right and a large portion of the value was coming in cash and finally there was no restriction and plenty of liquidity in disposing of any paper consideration .
the “ sale “ isn’t really any such thing .
wholesale prices will go up but what this “ great release “ is , from what i can see is simply someone has taken the time to reprice probably totally overvalued “
premium “ names which have been sitting in inventory for years or not even marked for sale until now :
reprice them in a great fanfare to more realistic prices , still many fold higher than the basic annual wholesale price and hope some get snapped up .
a smart move in my book . they clearly weren’t selling at the “ old “ prices ...
my gut tells me no more than c.$3M rev .
and that is truly a guess .
as i said if they sell for $20M + then that’s a good sign for MMX .