actually 2crazy , i am saying the opposite !
i am saying that icm has done even better since being acquired by mmx .
all staff fired , incl TF , prices increased and AB accelerated! actually all done by TF i would assume .
is just the other “ side” of the bargain that isn’t what it was presented as and has consistently floundered since and failed to deliver any profits .
oh well , i guess folks will believe what they wish to believe and see what they wish to see , but my posts have always been backed up with logical and easily calculable numbers .
will retire back to watching the Masters i guess .
just trying to shine a light on how the numbers are ACTUALLY made up rather than how PI’s may have been led to believe .
anyone who thinks i was happy to sell at 6p or under just hasn’t been paying attention .
and further bakky ,
i have indeed spoken recently to each and every one of the icm vendors and told them that i would advise against selling at these prices and that i will do my utmost to repair their damages and push for the changes needed in this business to improve the SP and that i was mindful to buy back in , if i feel and see the full situation has been acknowledged and understood and try to help improve the SP based on genuine numbers and an open picture rather than the way it was managed before .
may be a rocky road in the short term but i assure you i would like to see this SP in double digits . a little bit of window dressing and some cost cutting isn’t going to make that happen imho
bakky ,
the purpose of my post was NOT to beat the SP price down , i think it’s pretty much as low as it goes ...
i see you guys here with what may be vain hopes of contributions from .law /.london /.vip based on headline DUMS numbers which in truth are very misleading and probably isn’t where the “ meat “ of any profits have been / will be .
if you start with a clean sheet of paper on each TLD the math is fairly simple DUMS x genuine wholesale less any partner payments and a minuscule cOGS number per tld .
a domain that may only sell 5-10,000 names can be profitable if priced properly , ditto for the tlds with over 100k regs . i would sooner have stable dums at proper prices than what has clearly happened here before . $1 or under domains have no place in any of today’s registries , that game was played and abandoned a while ago by the serious players .
i have stated and will re-iterate that i would be willing to buy tens of millions of shares in the price range they are today once i believe that all skeletons in the closet have been acknowledged and adresssed. in truth if i had felt the company was historically in the process of doing that i would likely have never sold but held on for the 10p plus we originally got into this for . TH and MS were simply perpetuating the opacity imho and i lost faith .
yes I did say that..
and my numbers aren't really speculation as relates to the adult TLDs.
90,000 names at almost $75 per names, icann and other Cogs detailed, the AB number was conservative if anything....
approximately $7,500,000 contribution ... less the share of lets say $6MM overhead, how would you want to allocate that? on Dums? that would be around 3.6% so lets say $250,000 or by TLD which would equate to 12.5% so perhaps 800k there, still leaves circa $7MM nett plus or minus (and not by much ).
My figures are and have always been spot on, if you refer back to my prior postings they were exactly the same numbers then.....
Dont get me wrong, Im saying there is value to be had here, potentially a lot of it in upside from where we are, is just going to take a deep breath for the scabs to be ripped off and the business remodeled.
this is exactly what I believe that TF , if he is given leeway to do so, can effectuate, but will take at least one billing cycle to wash through which will be a year. IIRC, price increases have to come with 6 months notice as per ICANN rules and then you have to see what renewal numbers are at the new prices...
32 olds at normalized prices making a suitable balanced contribution and this company can be worth $180M (15p a share) as part of a consolidation play.
to get there is going to take some bold actions and decisions , some that may ruffle a few feathers, is all I am saying.
BB,
did you really say that ?"one former director told me"?? A couple fo former directors told me a lot also...
but seriously, please pick apart my numbers as you wish which show the 4 making possibly as much as $7MM a year now nett, and the company is making $4M ? doesn't taking a 7 MM profit to a 4 million one, mean there is a 3 million loss somewhere else?
Also my interested and agenda shouldn't be confused. of the original 6 ICM vendors 5 still own shares and 4 of them have never sold a single share. these are my friends and colleagues and I take their money and investments as seriously as my own.
perhaps the company may , in the interests of full disclosure provide revenue and nett contribution per TLD, then any mysteries would be solved .
I am pretty rock solid on my numbers and will stand by them +/- ....
BB,
you think that .law makes a positive Nett contribution to the operating profits? I think you are sadly mistaken and the "partner" that stumped up the $16-18 MM originally to fund the auction win on the TLD is taking very single penny piece out of that particular TLD. Similar to the .London debacle. I would 100% welcome as im sure all of the shareholders would and analysis by TLD of exactly how much each and every TLD "contributes" after all COGS , partner payments and "marketing support" may be paid. If we could all see that we would , in fact, finally get a true picture of this business. isn't hard to produce a 6 row spreadsheet with 32 columns would reveal all.
MMX Value proposition:
all the below is based on the public available information and my historic knowledge of ICM.
Please forgive the long acronyms but I just wanted to lay this out in a formulaic way as this is how it will and should be analyzed.
Variables: * indicates my best guess and likely numbers.
ATPE=notional P/E ratio for adult themed TLD portfolio= 10*
TLDPE= notional P/E for diverse well preforming TLD portfolio=15*
ICMEBITDA=original ICM profits $4MM
OMMXEBITDA= original purported MMX profits $4MM
OHS= overhead Savings achieved by merging Ops (already achieved) $2MM
FOHS= future OH savings, say $1MM *
ABEBITDA= annual AdultBlock profits +$1MM*
CMMXEBITDA= current losses on original MMX portfolio= (- $3MM)*
*= approximation, actual may be more or less.
View in 2018…
ICMEBITDA + OOMXEBITDA + OHS = $10MM X TLDPE= $150MM Market Cap = 12.8p per share
View Today…
ICMEBITDA + OHS+ CMMXEBITA + ABEBITDA= 4+2-3+1= $4MM x ATPE= $40MM market cap= 3.5p a share.
Potential view if management team can re-engineer the business.
ICMEBITDA + OHS+ OMMXEBITDA+ FOHS +ABEBITDA= $12MM X TLDPE= $180MM market cap= 15p a share…
Is a BIG if, to turn around what is apparently a $3MM a year loss on the original 28 TLDs into a $4MM profit, that’s a $7MM swing… it means a complete whole new approach to pricing and DUMS and cost of sales, partner payments etc.
For the doubters amonst you , just to make it clear and guesstimate the current contribution to the bottom line of the original ICM names let me lay it out for you..
Lets say NO premium sales at all
Lets say a combined 90,000 DUMS for the 4 adult TLds
Wholesale price $75 per name.
Lets say just $1MM sales for AB(with negligible Cost of goods for AdultBlock)
That’s 90,000 x 75 plus $1MM for AB = $7,750,000
Less costs attributed to those 4 TLds.
Icann fees: $150,000
IFFOR fees: $100,000
Back end costs at say 50 cents a name= $45,000
7,750,000- 150,000-100,000-45,000= $7,555,000 less say $500,000 allocation of general overhead means $7MM net EBITA out of those 4 names.
There are supposedly well over 2 million registrations on the other 28 TLDs and I am confident therefore that these names must be losing $3M a year if the overall results are just $4M operating cashflow as was just reaffirmed.
The RUB is that if that is the accurate picture of the business now, no would be buyer will pay a premium PE for the combined business…hence the languishing SP…
The turnaround is a big job, not just a quick lick of paint and hand to a keen buyer waiting in the wings.
The whole portfolio needs to be refashioned to make each and every TLD in it profitable. That may lead to a sharp reduction in DUMS but DUMS are pure vanity as the numbers above show.
5) If I am correct , then this likely also happened in 2018 also and again I am also convinced that this is perhaps tied into the same group of parties who participated in the what I now believe to be largely “fake” China premium sales booked in 2017 but never paid for.
6) The company, if it is to trusted going forwards to be open and transparent, should give further clarification of exactly what the $938,000 and the $790,000 amounts incorrectly taken as revenue in 2019 relate to. The same or different issues?
7) If I am correct and the $790,000 relates to Chinese “fake” registrations then the company should also conduct more investigations and trace this to the core and whether in anyway related to the $5MM+ of late 2017 premium .vip sales. The company should also do a forensic accounting of those deals and disclose ultimately, 3 years later how much of the cash actually owed the company has ever been collected and how much remains on the books paying close attention to any potential “return” payments to the same or connected parties disguised as “ deferred charges, capital expenditure” or any other such fraudulent methods.
8) The market, investors and the ICM vendors relied on these numbers backed up with explicit and specific warranties concerning them in 2018. If they were, indeed, fraudulent, now is the time to pull that scab off. If they were not, then the company should give a full accounting of those amounts billed/paid/written off or still recognized on the company’s books in order to lift the smell of suspicion around these transactions.
To recap, I am delighted at Tony Farrows appointment , I do believe the company has value much greater than the current share price, but feel we have only gotten less than half of the story so far and that until and unless the scab is fully pulled back no credible purchaser will touch the base with a proverbial bargepole.
If the company addresses all of these issues and emerges as MMX 3.0 as I guess it would be called, perhaps with much lower revenues, much lower DUMs but real cash producing genuine DUMs, then I for one would invest in and support the company pending its eventual sale.
Good Morning Chaps,
1) I had No idea an RNS was coming out today regarding the conclusion of the Investigation when I posted my thoughts yesterday.
2) Back when the initial investigation RNS was announced on 9th October, I send Guy Elliot a list of around 5 potential candidates that I thought would be suitable for the CEO job , in the event the investigation led to the departures of TH and MS. Tony Farrow was the first name on that list.
3) I am pleased that TH and MS have gone and TF is now in charge. TF is supremely smart and a very, blunt and no-nonsense type. Almost 180 degree opposite to TH. He understands the domain business intimately and I’m sure will assess the portfolio rapidly and in the meantime all the trains will continue to run on time.
4) I may be a cynic and perhaps too long in the tooth, but the wording of the RNS, particularly as it relates to the “other” two 2019 contracts caught my eye immediately.
Again, to restate the position, I have absolutely NO inside knowledge relating the initial investigation but here is my take on this mornings RNS and what I “think/suspect” it means.
a) The initial contract problem was related to dealings with one specific registrar regarding the AdultBlock launch. My guess is that they took the $1.125 million or whatever from this RAR as a down payment against hoped for AB sales on a “sale or return” basis and to fudge the year end figures decided to, fraudulently recognize some $938,000 or so of it as revenue and therefore profit .
b) The other two contracts, I suspect are NOT to do with the same issue, i.e. AdultBlock. A casual reader of the RNS would naturally think they most likely were, but to my eagle eyes and suspicious nature they are likely NOT. The reason I say this is that firstly the RNS is quiet on the whether they relate to the same issue, which again to me, means they aren’t. Secondly the nature of how they have been addressing indicates that they relate to something different. To me the RNS reveals that these 2 extra contracts relate to $790,000 taken in on one hand , recognized as revenue and the same amount paid OUT on the other hand disguised as “deferred charges or capital expenditures” basically netting out the overall transactions which have in effect now been wiped off in the restated P&L. I would almost be confident enough bet anyone here a pound to a penny that these two contracts relate to .vip or .work “fake” registrations. To spell this out, if I am correct, the company will have paid /refunded certain parties to register/renew domains in a deliberately disguised fashion to inflate revenue and DUMs numbers. I alluded to my suspicions of similar behavior yesterday and todays RNS only serves to bolster those suspicions.
i hope that isn’t the case and perhaps naively i have confidence in the process .
an unequivocal statement either way to close the investigation when complete is what’s needed .
innocent or guilty ( of something ).
if guilty - no option but out .
if innocent . a full and plausible and easy to understand explanation of what this was all about is needed.
if the sense is that it’s brushed under the carpet then i agree the future doesn’t look great .
regardless of investigation or not , the company needs to cleanse its DUMs number and weed out all the “ hokey “ stuff , start charging proper prices for proper domains and make the portfolio easy and transparent to acquire by one of the credible buyers out there for a premium price .
failing that i think the value will languish with only interest in it from people trying to take it private for a song , cleanse and resell it for double or treble the price or for opportunistic buyers at a discount .
i have a lot of time for guy elliott and Lombard with Rob Giles who is Henry’s boss, together with Henry .
i believe them to be upright and ethical characters .
they both have reputations to preserve .
it can be very difficult for non execs to see through any well hidden and mis represented information skillfully presented to them by the exec team .
the new guy Disher seems top quality and i can only assume that it may be him that spotted whatever it is that is being investigated .
yes , i do think the ICM vendors may have been misled at the time of sale and i am hoping that this investigation now goes back to that period .
the original deal with MMX was envisioned and agreed as an ALL share deal , but we were “ spooked” by some of the China stuff during our due diligence which focussed specifically on the veracity of those premium VIP deals being legit and collectible and the hundreds of thousands of apparently “ spurious “ bulk vip basic registrations . we then said we were out of the deal unless they came up with some cash and $10M was agreed and we sought and were provided with written warranties from the directors that the accounts receivable and all the registrations were bona fide . these warranties were entered into by the company in early May and were again reaffirmed at closing in late june 2018 . these areas were of particulate concern to us at the time but we relied on the warranties given , as we had warranted our numbers likewise .
as mentioned how do you think we felt when the accounts to 30 th june 2018, just 10 days after being legally assured otherwise contained a $2.1 million provision ? not pleased .
as for suing the company ? what for ? millions of dollars or tens of millions of extra shares ? how would your share price look then ?
Sue TH and MS? they don’t have the means ...
i just hope the investigation dig deep into the China Syndrome and any skeletons that may be there get addressed : for sure it’s this issue that has frightened all would be buyers away .
the industry scuttlebutt is that the China performance is and always has been very “ unexplained “.
i will leave it at that and hopefully the investigators can clear it up for all involved .
Bilko ,
under covid my retail therapy has been only used in the vehicular department . traded the bentley for a 812 Superfast , then upgraded the Cullinan to the new Black Badge version , got my first ever american car , one of the new mid engined c8 corvette , got bored with it and traded it back in for my original bentley which thankfully only had 6 more miles on it : never been the first and second owner of the same vehicle before : on a more serious note , i did for the first time in my life buy a couple of guns that i truly hope i never need to use . i guess we may see in a week or so :-)
drk,
agreed on your points but in truth the early 2018 SP was based on the h2 2017 performance which was presented as stellar and included $5M of premium china deals which may turn out to be all “ fake “.
wipe $3-5M off for that and since the acquisition i think you will find that the pre- existing mmx business would have been in a constant state of LOSS every period since ..
Honestly ..... i think without the icm deal the company would have crashed by now ...
“ emporer has no clothes “ and all that .
the legacy mmx tlds need a “ reset “ to be normalized and transparent not an opaque syrup .
i don’t and never have wished to either run or control this business but would support , with hard substantial cash buys a reliable management who knew how to do this .
thanks Norrab but my operational days are well behind me .
plus don’t forget i made the “mistake “ of selling to MMX and believing they could deliver on the other 28 tlds in the stable . My bad .
i checked around and some of the icm vendors are still stuck in so feel a sense of responsibility to them and to the other investors who believed, like i did , that the exec team could make a profit out of the legacy mmx TLds .
having fired all the ex icm staff , without knowing the exact numbers anymore i am sure that the icm portfolio is contributing at LEAST $5MM a year NETT profit to the company if OH is attributed on a per Dums basis . that means that the rest of the company is breaking even or losing money on over 2 Million domains ! that just isn’t acceptable. my ongoing mantra was that the legacy icm names should make half of the overall ebitda and the 28 others should make the same .
if you do the simple math , if they were just making a free and clear $3 a name on 2 million names that would be $6M
in truth i would prefer to see 1 million names contributing $8 each .... plus icm and now we would be be talking ....
like i said , simple back of fag packet math .
if you think about it , with the costs associated of doing anything with a domain name the cost of the domain , whether it is is $3 or $20 isn’t the thing . cheap domains just encourage fake and scammy “ registrations “ and no acquirer is going to want those : they just want reliable , predicable , proper domain registrations that are subject to the usual renewal rates and prices to add to their portfolio of same and they will pay a premium price for that annuity profitable revenue stream.
a million names with $15M nett revenue and low costs is worth upwards of 10p a share .
isn’t hard to do the math .
scotty ,
i think whatever it may be wouldn’t impact the SP much more now ... what is important is the revenue stream going forward and the GROSS profit on those . the OH needs to be reduced just to show how easy this nice cleaned out business is to run ... personally if the revenue decreased and the DUMS dropped dramatically , perversely i think the business would be seen as transparent , clean and therefore more valuable ... and easily aquirable ( if that’s even a word :-)
Scotty ,
it really isn’t rocket science . quite the opposite , is a super simple business . there are 4 or 5 eminently qualified and available candidates around who could do this standing on their heads .
i will give my advice here and to the company for free as can all be written on the back of a fag packet .
for the record i currently hold no shares in the company and have not traded in the stock since i sold in May . depending on what may or may not be found and disclosed in the investigation , at current prices i see the shares as a good medium term buy and further , given a positive outcome of the investigation i would most likely buy shares in large quantities at these prices .
yes Huckster that is how I see it. However, if the same players see that the HOUSE has been cleaned and the skeletons removed then it could be open season. on the bright side, I am aware of some other bigger value consolidations that may be in the works that will set good precedents dn comparables to judge a transparent and reliable MMX user base against in valuation terms.... in the meantime, chunk the cash out, return out to shareholders so investors are happy to wait for the "event".... That was the plan for the Icm vendors back in 2018, didn't happen but can still happen if things are addressed properly now
BB, totally agreed, Strip out all of the cra* and potentially flakey registrations , even if it means a large drop in Dums, clean out a lot of the OH, come clean about any historic nonsense still on the balance sheet and leave yourself out there as nice and clean, chinking out good , unquestionable cash that makes you an easy fold in.... the business IMHO needs a staff of somewhere between 5-8 people right now.
no Bakky, I dont think so.
the landscape for defensive registrations has changed 100% since we were able to secure as many SRB blocks back in 2011. Back then there were only around a dozen new gtlds and at that time the policy of the big brands was to "cover all bases" by securing registrations in ALL non ccTLD variations , as it was a manageable number and "prevention" was viewed as better than 'cure". That was turned on its head totally in the 2014 new gTLD round when several hundred new gTLDs were brought to market. The intellectual property constituency from what I saw decided to change tack and adopt a "whack a mole" approach of dealing with any "issues" as and when the arose. I forget now but when we launched . se* and .por* in 2015 or whenever we secured 1-2,000 defensives in each of them vs the 80,000 of so for .xxx, despite a special offer early bird priority offer. If I had to guess, I would think perhaps 3k or so unless the RARS are very creative is packaging the expiring SRBs into new simple "registrations" for their white glove big brand customers as they expire in 2021. in truth, common or garden "registrations' of these names which I believe now have a wholesale price of circa $80 a year , make the company way more valuable than a one time lump sum of cash for a "block". any potential buyer will want to see what THEY will make out of the user base year after year rather than how much the company was able to rake in and account for in advance for 10 year "blocks", esp if most of the revenue is taken in year one which I have a feeling it is being here...
BB, none of this is rocket science....in a business the small size of MMX you either know that the sales you have made are clean and good or you know they may be "at risk", as long as you are open and transparent about that, then its fine. If I recall wasn't MS a partner in one of the big 4 accounting firms before he went into ICANN? You dont miss stuff like this..., IMHO