Assessment of the domain portfolio on the example of MostWantedDomains
This week, the entire domain industry was noisy about buying the domain portfolio MostWantedDomains, which was acquired by the leading GoDaddy registrar for an unknown amount. The package includes about 70,000 old spill names (without adult subjects and without new zones) with class 373.com pearls, faculty.com, carauctions.com, ibill.com, bikerentals.com, kitchenchef.com, etc.
Both parties have agreed not to disclose the terms of the contract. Perhaps in the future, someone with a falcon eye will be able to calculate the amount on the check from the financial reports. But to whom it is interesting today, a cat has been presented with a guide on the valuation of such virtual assets with possible arguments that can be used during tenders.
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Some basic data:
According to the brokerage league , in the past, MostWantedDomains publicly reported about 236 sales totaling $ 5.6 million. This is about $ 24 thousand dollars for a sold domain.
Given that the other two top players had already been acquired by GoDaddy before (AfterNIC and TDNAM), the seller was the 11th global domain dealer.
In finance, there is no single method for calculating the value of real estate. Sale, as a rule, will take place when either the seller is more desirable to quickly sell and throw off the price a little lower than the market price, or the seller has the opportunity to pay a premium premium. In practice, use a variety of practices for evaluating and conducting trading, which are listed below.
1. Multiplier for past transactions
This year, GoDaddy has already acquired a similar portfolio of Marchex. Then 200 thousand domain names sold for about $ 140.50 per share. With such indicators 70 rear. MostWantedDomains names were valued at $ 9.8 million. The seller most likely did not agree to this amount, since having sold only 0.05% of all assets, they realized the same figure.
Perhaps the parties agreed on a different factor, which satisfied both the seller and the buyer.
2. Multiply past sales
Here the seller could suggest using the average price of historical sales. In the case of this portfolio, it is $ 24 thousand. Managers of large domain arrays say that with such prices, 5% to 20% of domains will be really “selling”. Assuming that the parties have agreed on a 10% level of "corruption" at an average selling price of $ 12,000 each, the total estimate will be about $ 84 million, that is, about $ 1,200.00 per name when compared with method 1.
One can speculate on how negotiations developed further. Most likely, GoDaddy began to give other arguments to drop the price, and the seller laid out several hundred top-quality domains with a six- and seven-digit dollar valuation.
In any case, the amount hardly exceeded the $ 80 million bar.
3. Discounted cash flow
We do not know what part of the past sales of MostWantedDomains was not disclosed by the company. From experience, they say, it is at least 50%. Let's offer that half, including other income from leasing, parking, and other operations.
In this case, the company's revenues looked like this:
* - assuming that neatly.com sold for $ 100 thousand; MostWantedDomains revealed only that it was a six-digit deal in 2015
It looks like in the past, the portfolio brought ± $ 1.5 million in cash annually. Discounting at a rate of 10%, we get $ 15 million.
GoDaddy could not agree with the multiplier (rate) and tried to reduce it from x10 to x5 (or 20% annually).
The seller would definitely remember the terminal value of the portfolio, adding from $ 10 million to $ 20 million to the already discounted $ 5 million.
As we see, based on the cash flow, the portfolio can be valued at around $ 5 million ... $ 20 million.
A very delicate issue of terminal value is at hand to the seller. Selling 50 domains per year, 70,000 names will be enough for a millennium. No company in the world looks so far beyond the horizon. And judging by the trends, average prices are constantly increasing, thereby increasing the future value of assets.
Conclusion
With 95% confidence, it can be said that the transaction ranged from $ 10 million to $ 40 million. Given that the seller was very inclined to sell and that GoDaddy’s shares rose immediately after the purchase, the real price fell in the lower range, between $ 15 million and $ 30 million
It turns out that GoDaddy wrote a check for about $ 22.5 million ± $ 7.5 million.
I wonder if anyone has any other thoughts on this topic?
Both parties have agreed not to disclose the terms of the contract. Perhaps in the future, someone with a falcon eye will be able to calculate the amount on the check from the financial reports. But to whom it is interesting today, a cat has been presented with a guide on the valuation of such virtual assets with possible arguments that can be used during tenders.
')
Some basic data:
According to the brokerage league , in the past, MostWantedDomains publicly reported about 236 sales totaling $ 5.6 million. This is about $ 24 thousand dollars for a sold domain.
Given that the other two top players had already been acquired by GoDaddy before (AfterNIC and TDNAM), the seller was the 11th global domain dealer.
In finance, there is no single method for calculating the value of real estate. Sale, as a rule, will take place when either the seller is more desirable to quickly sell and throw off the price a little lower than the market price, or the seller has the opportunity to pay a premium premium. In practice, use a variety of practices for evaluating and conducting trading, which are listed below.
1. Multiplier for past transactions
This year, GoDaddy has already acquired a similar portfolio of Marchex. Then 200 thousand domain names sold for about $ 140.50 per share. With such indicators 70 rear. MostWantedDomains names were valued at $ 9.8 million. The seller most likely did not agree to this amount, since having sold only 0.05% of all assets, they realized the same figure.
Perhaps the parties agreed on a different factor, which satisfied both the seller and the buyer.
2. Multiply past sales
Here the seller could suggest using the average price of historical sales. In the case of this portfolio, it is $ 24 thousand. Managers of large domain arrays say that with such prices, 5% to 20% of domains will be really “selling”. Assuming that the parties have agreed on a 10% level of "corruption" at an average selling price of $ 12,000 each, the total estimate will be about $ 84 million, that is, about $ 1,200.00 per name when compared with method 1.
One can speculate on how negotiations developed further. Most likely, GoDaddy began to give other arguments to drop the price, and the seller laid out several hundred top-quality domains with a six- and seven-digit dollar valuation.
In any case, the amount hardly exceeded the $ 80 million bar.
3. Discounted cash flow
We do not know what part of the past sales of MostWantedDomains was not disclosed by the company. From experience, they say, it is at least 50%. Let's offer that half, including other income from leasing, parking, and other operations.
In this case, the company's revenues looked like this:
* - assuming that neatly.com sold for $ 100 thousand; MostWantedDomains revealed only that it was a six-digit deal in 2015
It looks like in the past, the portfolio brought ± $ 1.5 million in cash annually. Discounting at a rate of 10%, we get $ 15 million.
GoDaddy could not agree with the multiplier (rate) and tried to reduce it from x10 to x5 (or 20% annually).
The seller would definitely remember the terminal value of the portfolio, adding from $ 10 million to $ 20 million to the already discounted $ 5 million.
As we see, based on the cash flow, the portfolio can be valued at around $ 5 million ... $ 20 million.
A very delicate issue of terminal value is at hand to the seller. Selling 50 domains per year, 70,000 names will be enough for a millennium. No company in the world looks so far beyond the horizon. And judging by the trends, average prices are constantly increasing, thereby increasing the future value of assets.
Conclusion
With 95% confidence, it can be said that the transaction ranged from $ 10 million to $ 40 million. Given that the seller was very inclined to sell and that GoDaddy’s shares rose immediately after the purchase, the real price fell in the lower range, between $ 15 million and $ 30 million
It turns out that GoDaddy wrote a check for about $ 22.5 million ± $ 7.5 million.
I wonder if anyone has any other thoughts on this topic?
Source: https://habr.com/ru/post/272887/
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