3 ms·

This is quite cheap actually. 12x multipler - raise prices(10%) 3 times and it's down to 9x :) Viewed as a perpetuity the income should have been valued way hi

This is quite cheap actually. 12x multipler - raise prices(10%) 3 times and it's down to 9x :) Viewed as a perpetuity the income should have been valued way higher - around 4 billion. This deal just stinks.

zhoujianfu 7y ago
But what was their profitability? I saw in some other thread it estimates like 50%, which would put this at around a 24x p/e, kinda normal/high?
- formercoder 7y ago
  Indeed, revenue multiples are dangerous. I’m guessing they bought it at a significant ebitda multiple making the deal sweet for the sellers. However, the private equity MO is going to be value creation through margin improvement. When they flip it their proceeds will be much sweeter. They’ve most likely modeled in multiple contraction as that’s rather common with tech buyouts these days. If the market stays hot they make a killing.
  - ddingus 7y ago
    If they simply make something more lean, no real impact to domain name holders, fine. There is some value there. But, nobody drops numbers that large without very fully exploiting what they see as an opportunity. The opportunity is to raise prices to max market will bear, then flip it. Given the intent behind .org, this is artificial value, created out of both position and leverage. I am beginning the work to be rid of my .org That will cost me. Fine. I abhor this kind of thing. A lot more money will move unnecessarily. I do not want to be a part of that.
eadmund 7y ago
This comment and its parent are the two keys for me in this whole rotten situation. ISOC are like Esau selling his birthright for a mess of pottage (i.e., a bowl of lentils). They could have done so much better for themselves, for the Internet and for society at large by holding on to the domain.
- yborg 7y ago
  What makes you think that this won't be repeated for other domains? The high level leadership at ISOC/ICANN now have the model for exiting into a lucrative future career as an equity partner. The top officials at ICANN are merely paid in the $300K-$600K annual compensation range, surely an insult for the rulers of the Internet... https://www.icann.org/en/system/files/files/remuneration-practices-fy18-01jul17-en.pdf https://www.icann.org/en/system/files/files/remuneration-pra...

zhoujianfu 7y ago

But what was their profitability? I saw in some other thread it estimates like 50%, which would put this at around a 24x p/e, kinda normal/high?

formercoder 7y ago
Indeed, revenue multiples are dangerous. I’m guessing they bought it at a significant ebitda multiple making the deal sweet for the sellers. However, the private equity MO is going to be value creation through margin improvement. When they flip it their proceeds will be much sweeter. They’ve most likely modeled in multiple contraction as that’s rather common with tech buyouts these days. If the market stays hot they make a killing.
- ddingus 7y ago
  If they simply make something more lean, no real impact to domain name holders, fine. There is some value there. But, nobody drops numbers that large without very fully exploiting what they see as an opportunity. The opportunity is to raise prices to max market will bear, then flip it. Given the intent behind .org, this is artificial value, created out of both position and leverage. I am beginning the work to be rid of my .org That will cost me. Fine. I abhor this kind of thing. A lot more money will move unnecessarily. I do not want to be a part of that.

eadmund 7y ago

This comment and its parent are the two keys for me in this whole rotten situation. ISOC are like Esau selling his birthright for a mess of pottage (i.e., a bowl of lentils). They could have done so much better for themselves, for the Internet and for society at large by holding on to the domain.

yborg 7y ago
What makes you think that this won't be repeated for other domains? The high level leadership at ISOC/ICANN now have the model for exiting into a lucrative future career as an equity partner. The top officials at ICANN are merely paid in the $300K-$600K annual compensation range, surely an insult for the rulers of the Internet... https://www.icann.org/en/system/files/files/remuneration-practices-fy18-01jul17-en.pdf https://www.icann.org/en/system/files/files/remuneration-pra...