Uh, present opportunities that thought,
Hey everybody, welcome to million dollar domains, Wolf, gang. It’s good to see you. And you were seeing multiples on a much higher level. I’m going to ping a couple more people in here.
Well, if you look historically
to see prices come down and generally we’d argue, that’s a great time. Turn off the business channel here, Dave, you do work full-time and domains, or you have the ability to, uh, to watch CNBC. I just can’t stress enough how it’s been the key to keeping me connected with, um, you know, the real technology world.
And, uh, and it’s just a terrific show that the access that it provides and in a world of new media, when, you know, we all want to talk about the internet and beyond the internet, the metaverse and the, that averse and all the other versus, you know, TV is not a terrible place where, uh, myself and a couple hundred million people can all watch some great content easily.
And I’m in that content, knowing that it’s going out to an audience. It’s great content. And, um, the reason I mentioned it is every day on CNBC, which is a U S cable channel. I’m sure you could get it streaming, um, at 11 Eastern and they have something called tech check used to be called a squawk on the street.
No, it used to be called a tech alley, I think. And that was referencing back to the first internet bubble. There was a part in New York day called Silicon alley, and I think they were still carrying forward some of their naming, but what it did was it, it was a recognition from the east coast, New York stock exchange focus business network that a lot was happening in Silicon valley on the west coast with west coast companies.
And the show is about an hour. It goes from 11 to 12 Eastern and it has a little edgy or flare and it addresses what’s going on in technology. And, um, You know, since literally when I graduated college way back in 1985, uh, one of the things I’ve done is watch what was then called FNN in Los Angeles, the financial news network, some of whose alumni are still on CNBC.
Um, it’s been a way for me to keep up to date with what’s going on in the world. And the reason I think it’s particularly important for domain name investors, is that. It’s easy to look at your domain name and say, I think other people should want to buy my domain name. This is why I think they should want to buy domain name my domain name.
This is why I think they should do it. This is what I think about my name. And you can sometimes get such a self-focused view of what you want other people to think that you miss out on a way that I’ve been lucky or successful doing domain name, investing. Which is the say, what are other people doing?
And how can I buy domain names that would appeal to what other people are excited about and investing about and seem to think right now, now there’s no doubt that if people are wrong and you’re right, and you have a great name and a trend that’s going to come about, then stick with it. But sometimes you have to give a realistic nod to what people are doing or people are saying.
So anyway, I say that because I’m just sitting here watching, uh, uh, you know, even today’s article, even today’s show, um, you know, talking about apple and major league baseball in talks to stream baseball games live. And if you think about your sports domains or your baseball domains or your TV domains, and you think about some small things that are happening and for small businesses across the U S that’s one thing.
But when you’re talking about a $3 trillion company, And major league baseball, which produces 162 games a year for 32 different teams. How much programming that is? I think, yes. If you think you’re going to sell domain names to people in this space, you know, it helps to be aware of what’s going on. So anyway, that’s my little preamble today.
Hello, Andy. Hello, Jason. Hi Dave. Hi Todd. Seeing Todd there. We finished up last week. We had, I had talked about syndicating domain. And shared ownership of domain names and whether domain investors, plus those of you listening that are digital investors would want to buy shares of a domain name, not the whole domain name, but either to buy names that they might not be able to take down themselves to get exposure to names that normally they don’t or are not available to individual investors they’re gone, they’re swiped up.
And what I want to talk about today would be another reason that even digital investors would, might invest in million dollar domain names. And that would be diversification. I think that if you, as I talked about last week are limited to investing in domain names by what is the size and scale. Of the individual names that you can buy fully.
You may not have a diversified investment portfolio in domain names. And one of the places you’re probably gonna miss out is million dollar domain names. Now you can say if names like purple.com and rainbow.com and make.com and, and poker.com sell for one to a hundred million dollars, that’s going to help domain names throughout the whole, uh, ecosystem.
And that’s true, but if the demand for domain names and the high prices that retail users are buying domain names for, for their functional use, not just for their, their neatness as a digital asset or as a collectible, but for their functional use, that’s where we’ve seen the highest prices. And if you’re listening to million dollar domain names today, Well, we try to do here is talk about million dollar.
That would be worth a million dollars to the right user. And in many cases, million dollar domain names have become $5 million domain names and $10 million domain names. And we’re seeing eight figure sales, um, especially at the top of the food chain. And so what I try to do here is talk about million dollar domain names for both buyers, people interested in and investing in with them, for their company, for their startup, for a division of their company.
If you’re a company that owns million dollar domain names, I want to be able to talk about million dollar domain names to give you an idea of the, the background what’s going on in this business. And if you’re investing in billion-dollar domain names or a million dollar domain portfolio, We talked about some of the things that, that, you know, they have to look at it and that’s different maybe than buying auction names or hand registration names.
Certainly back to the securitization. What are the things I think that you might want to consider investing in shared ownership of different domains is to give you exposure to categories that you might not be able to have exposure to. For instance, one word English, word.com, usually trade for 50,000 to 5 million and.
You’ve only got 300,000 invested in domain names. Do you really want to take $50,000 and buy one name and have it represent 15% of your portfolio in one name at the same point you might want to exposure to the fact that that’s kind of the one word.com is kind of the Dow Jones of domain names or short two and three letter.com are kind of the S and P 500 of domain names.
You know, always going to have value, always seem to have demand, always seem to have some liquidity, unless you can afford to pay the 25 to 50 to 100,000 to buy three letter names or the a hundred thousand to 2 million to buy one word name. You may not get exposure to the risk profile. And million-dollar domain names.
And I think that risk profile is different than a lower price name. I think in million dollar domain names, if you’re buying them right, you probably have a 20 to 30% downside. There’s no doubt that domain names are not liquid at five, bought a domain name. And I mentioned one that I bought last year, fifties.com, which I liked for people in the decade of their fifties.
And I think it’s probably a name that I’d like to get a half-million dollars for. And I think that, you know, liquidity wise, maybe I could get out of it if I had to at 25,000. So say I paid 25,000 for it. I think I would usually be able to get out of it over, say 60 days for a 30% less. And I think that’s what liquidity is and, you know, big one word domain names.
But I think there’s names that you might buy as an investor for a hundred dollars or $200, where if you had to get out of them, you might take a 50% loss or more, or may not even be able to get out of them. And then you look at your upside and you say, page, if I buy a hand registration name, I might be able to sell it for a hundred or 200 times my investment.
And I think a one word.com you might be limited to only five to 10 to 20 times your investment. Okay. But I think if the whole class of domain names and one word domain names goes up in value, I think you’re going to see that by owning names in the one word domain namespace or the three letter space.
And it’s not guaranteed that that’s going to flow down the, all the other parts of the market. There’s a chance. They all the other parts of the market, small business names, website names, search engine, optimization, names, vanity names, uh, end usernames. They’re going to do better than one word. But what I want to talk about was the idea that you can get diversified in an area.
You may not own that many assets. And if those areas are strong, you’ll participate in the benefit. One of the areas might be CV, cv.com, domain names, CVC v.com, domain names. That’s kind of an inside the beltway term. And what that means is a four letter domain name and it follows the pattern. Of C standing for consonant and the standing for valve.
So if you think about a consonant and vowel and a consonant and a vowel, you’ve got a four letter domain name, and you’re going to look here for names like Hulu. Hulu is probably the best example of a company where they probably weren’t able to get video.com or tv.com or streaming.com. So as a startup, they send it around the fact that they knew they wanted a short domain name.
And I still think length is one of the attributes of a domain name that determines its value. Almost more than anything else. And so they said, well, three letter names, or, you know, at the time were 60 to $80,000 at the floor. And they probably said, well, we can’t go three letter. Let’s go four. And when you’re in the foreign letter space, you’ve got a universe of 450,000 domain names.
If you look at 26 letters in four positions, you get 450,000 potential domain names. But as we’ve all seen, there’s a lot of four letter domain names that are hard to pronounce. So don’t make sense that are great for initials. You know, if you’re the lower Marion soccer association, you can be LMSA. And if you’re the American society of registered pediatricians, you can be a RSP or something like.
But I think if you look at the four letter and you want to make a brand name, one of the ways that people over the course of the web two O trend, which was kind of 2009 to 2018, was to buy a CVC V domain name. And what happened was the competition to buy those names and get those names, raise the value of those names, where they got some liquidity.
So right now, if we look at the name biostatistics of the names that sold yesterday, there’s over $300,000 worth of premium domains as sold yesterday. And those reflect mostly wholesale prices. And we saw the name jocko.com sell J O K O. I think that’s the one. Hold on. Let me look. Yeah, jock. Third or 25,000 at named jet.
And that was a whole sale sale. And the reason I say that is most of the time it named jet, you have a small universe of expired domain investors that are buying domain names, where the customer has left. The name expire. The registrar has stepped in and before giving that name back to the registry, they’ve decided to sell the name and they’re going to keep the proceeds and split them with the auction platform.
That’s helping them sell that name. And the reason this is an attractive way to buy domain names for investors is that you really don’t have a seller. You have a seller who’s already decided I want the best amount of money I can get to. And, and because of that, you’re competing against investors and you’re competing against all the other ways people can invest in domain names.
And because of that, there’s a certain ceiling that’s going to be hard to go above because I don’t think anybody would pay a hundred thousand for jocko.com because they might sit there and say, well, gee, I can buy a lot better than this for a hundred thousand dollars. So I think you’ve got a ceiling and I think you’ve got mostly wholesale buyers.
So it’s sold for 25,000 at wholesale. So let’s say that that domain name, if you had at least five or 10 investors, that would probably all pay above 20,000 for it say that it’s probably got a, a $35,000 wholesale value over the next six to eight months, and maybe it’s got a half a million dollar retail.
Now that may be hard to get that may be hard to get a startup, to choose, uh, for a CVC V name and pay a half million dollars. Remember the reason that a lot of startups bought the CVC V names is they couldn’t afford the one word domain names. So you’re always going to try to probably sell it at a discount to what one words are going for, but say you could do it.
So when I look at securitization, bringing everybody back to what I was talking about and partial a of domain names. I look at the fact that if I try to chase every CV, CV domain name, and I have to pay between say six and 25,000 to get one, I may have to chase 20 of those domain names each time having to outbid every other domain investor to pay the highest possible price.
To get that name and have it possibly represent a huge percentage of the invested assets I have in domain names. Now, if you’re thinking about what securitization does and parcelization does, it means that if someone takes a CVC V domain name say at $17,000 and splits it up into 17 parts at a thousand dollars each they’ve already secured the domain name, the sponsor.
So say I was the sponsor of the securitization. I’ve already secured the name and I’m going to offer 17 shares of a thousand dollars each. And I’m going to let investors not have to be there at two 15 on a Thursday afternoon and try to bid to get the domain name. I’m not asking them to say, well, do you want part of this domain name?
I have no idea how much it’s gonna be. I’m telling them exactly what their investment is, exactly what they’re going to buy and exactly what the terms might be. And as I shared with you last week, if I do securitizations, I’ll probably take a general partner share where LD investors get their money back.
And then based upon how much money they make, I take a percentage and that’s for me picking the name, putting the deal together, and then running the program. And I think for investors, you say, well, page, I’d never do that. Well, that’s great. It doesn’t matter to me, the people that don’t want to do it, you know, what they think.
But I think I’m probably going to explore this year market where people can own part of a CVC V domain name. And if over the next two to three years, I can sell that name for 30 to $200,000 to a startup who likes the combination of letters or just to another investor, maybe for, if the prices of CVC V keep going up.
Maybe there’s a way to sell it for two to three times our investment, me and the partners. Um, just because every time a CVC V domain is used, there’s less and less of it. And I think it’s that type of exposure. I’d be offering to investors both in the domain space and outside of the domain space. So I think would be a different risk profile than the money that you spend to buy hand registration names, or you buy outbound names or you buy auction names and you have to pay renewals and you have to, you know, manage them.
This would be the way to say, you know, two years from now looking back, people say, man, I wish I would have bought CVC V names at the beginning of 2022. Then that’s what I would look to deliver to investors is if CVC V names on average grow 20 to 25% or 50% a year, or maybe lose 50% a year that hopefully you’d be in one and you’d get the return.
So it would be available to that type of special four letter domain name. That’s a CVC V and that may be easier than trying to spend a whole year. Hoping to buy one. Now, if you can buy a CVC V for half of its market value in a private transaction, go do it. You know what I mean? This, this, this investment that you might make in a partial domain name, isn’t going to replace that because then you would commit to capital.
If you can buy something for 20 to 30% of its wholesale value. But I think what I’m talking about is what if you went two years and never got any exposure to CVC V and it kept going up and it kept going up and it kept going up and you said, man, I wish I could get one, but I can’t. That’s it, the businesses rigged.
And what I would say is I think we have to make. Available ways for people to invest in domain names, um, by buying partial shares of especially the most liquid and in demand groups that we have. So that’s what I’m working on for 2022. And I wanted to share that with everybody today on billion dollar domains, maybe take some questions and here’s some concerns.
I do welcome everyone to million dollar domains here in domain club. Uh, you can raise your hand if you want to come up and ask a question or make a comment. We are recording today, and this replay will be available on clubhouse for people who missed the show million dollar domains as part of domain club and it domain club.
We try to provide rhythms and talks and socials, uh, throughout the week to really grow the perception and the perception, the perceived value of the domain name, business, and domain names. And I think what you’re going to see in 2022 is some more shows some more off clubhouse activities and really a way when it comes to million-dollar domain name.
And I’ve said this before, but I’ll say it again, rather than having people only talk about million dollar domain names when they’re being approached for a specific name or when someone owns a specific domain and only wants to talk about the value of their specific million dollar domain name. I’m not sure we’ve helped grow the conversation of why certain domain names are worth a million or more five to 10 to 20 million and get people thinking about their objections or thinking about the frame of reference they may have as to why these special, unique digital assets are trading every week for hundreds of thousands and millions of dollars, because that’s a fact, this is not a, maybe that one word domain names are trading each week for four hundred thousand two hundred thousand three hundred thousand.
It’s not the fact that names that if you own them, you might ask a million dollars or trading for 60,000 or 80,000. So why not start thinking about the whole industry, thinking about how you might buy and invest in this space. And if you’re a company, try to understand and develop a story within your company of if the perfect name does come along, your ultimate domain name, have you pre-thought about some of the issues.
So you can move with the speed and deliberateness that you need to because only one person can only special words. Only one person can own a special, unique million dollar domain name at once your competitor buys it, or once someone buys a name that can use it for various reasons and you, and, and as you thought about it, you said, man, that would be perfect.
That word describes everything. We want our branding to be about our. And just at the point that you decide and you get other people to buy in, it’s gone because it was available and someone else bought it. So I think you do yourself a service. If you’re listening to this show and you’ve heard that companies are spending million dollars on domain names, you’re doing a startup and you’re wondering what leverage could I get?
What valuation could I get? What would be the Delta or the increase in the valuation of my company. If we went from a two word or a substitute or a second or third or 50th best domain name to the best domain name in our business. And could you quantifiably show that either as a return on the investment from advertising efficiencies or a better valuation when you raise.
Or a better attractiveness for joint venture deals. You can immediately get a payback on that domain name. And the reason I think you do get an immediate payback on your investment in the domain name is that, you know, once you buy it, if someone calls you the next day and says, we’d like to buy it from you, you’re, you’re probably either saying it’s not available because it’s so much part of our strategy now that you couldn’t pay us enough money.
And the reason I say that is we’re still at a spot where the value of domain names, million dollar domain names is uncertain. So in many cases, if I was representing a domain name, I probably have to convince the company that buys it, that it’s worth 10 or $20 million potentially over the lifetime ownership of the name, or maybe even $50 million for them to pay.
750,000 or 1 million or a million and a half in the absence of a second place, better where I can simply say to somebody, this name will sell this week for 2 million to get it from the current high bidder. You need to be two and a half. That’s the, that’s the way that most times we see price discovery, you only really find out what someone’s willing to pay when they say we want the name, we’ll outbid everyone else.
But until then, if they’re just the only, the only buyer, I think you look at it and, and, and you have to have done a lot of the work beforehand or else. You’re not going to be able to take advantage of the unique opportunity that might be presented that could be gone in a week or more. Because even though a domain is an illiquid asset because there’s a 20 year history in the trading of domain names, many people are buying million dollar domain names with a day’s notice or a half a day’s notice or one phone call.
And so you may not have six months. You may not have three months. You may not have as much time as you think you should have to make a million or a multimillion dollar decision. If you’re listening to me today and you’re interested in million-dollar domain names, you may be asked to decide today or this week, or to give an indication of whether your interest is serious to a broker or on a marketplace, or even if you’re in an auction, the auction review period, maybe 10 days.
Someone announces they’re selling a domain name and an option, and that option is going to happen in 10 days. And if you’re just starting to go through the process of getting your technical team on board, getting the finance team on board, getting the legal team on board, you’re probably well-served to almost do a couple of trial transactions in the five to 10 to $20,000 range.
And I hate to say this, if there’s brokers listening, even if you have to lead on a broker and simply offer 20,000 for a name that you know, they may want a hundred thousand for at least you can go through the process of getting your people on board for when you do have to act quickly. And I think this is going to be especially important as I wind this discussion back to security.
If I do do securitizations, where you’re going to be able to buy a thousand dollars, share in a investment in a domain name, it’s more than likely that once I make the program available, it’s either going to sell out that day or it’s going to be around for two to three weeks. It’s probably not going to give everyone the time they think they need.
And I have a lot of experience with this. We used to do tax shelters back in the late eighties, and we would buy a real estate building, you know, maybe, uh, you know, uh, uh, uh, a time square real estate building, or we bought one at the LA airport, you know, but you know about, uh, you know, 13, 15 story building we bought, uh, uh, 5 55, uh, what was that?
5 55 investors, 5 55 in New York. It was like a 46 story building. And we would have shares that were a hundred thousand dollars. And most of the time we had about a day and a half to sell our allocation of, you know, two or $3 million. So we had our investors, we had our doctors, most of our clients were doctors at the time they were ready.
We had their information, they had the, we had the wire instructions. We would send people out to sign these notarized documents. And, uh, you know, and we had our notary sometimes going into, you know, the equivalent of the room next to the operating room, you know, to get the doctor, to decide the paperwork and, and get to these investments.
So for something that’s attractive, I think the reason I’m talking about generically investing in domain names and investing in domain assets, if you’re listening to this podcast are here with us on clubhouse, is that I think I wanted to get you thinking about it beforehand, before. Here’s the name.
Here’s where it’s going. I’ve got 16 shares. Nine of them were sold. I’m probably going to take four. There’s three left. And you’re going to say page, that’s just salesman hype. You’re just trying to get me to do it. You’re trying to get me to act quickly. And all I can tell you is there may be a lot of people that do that, but I’m going to tell you for real, if I have most of the things sold and you say, how much time do I have?
I can’t tell someone else. Well, uh, even though you’re ready to go, someone else wanted five more days. So I’ve got to hold that spot for them. You know, it’s going to be first come first serve because I really wouldn’t know any other way, how to do it. Um, and I think, you know, when you see these NFT projects that go, you know, they either go fast or they take a while.
And if something takes a while, it might be that it has some defects it’s under-priced, it needs the story to be communicated. So I think it’s going to be one of the other. But that’s my thought on million dollar domains is right now is the time at the beginning of the year to decide, are you going to invest in million dollar domains this year?
There’s no hype right now around billion dollar domains. We have a steady stream of news and a steady stream of sales of million dollar domain names. But it’s not like NFTs. It’s not like cryptocurrency. It’s not like something double and tripling each month. You know, if you wait until something is so hot that the price is moving so fast, you may not be able to get that longterm discount to value that you need for these illiquid assets.
So I think right now is the time to decide what you want to do. Maybe you have to buy when it doesn’t seem like everything’s hot and that’s the time you can get a transaction done because your seller of a million dollar domain name, they may not know how 2022 is going to work out. They may not think, well, what if inflation reduces the value of non earning assets?
Like it like it, like it is, you know, what, if the concerns around the, the, the variance, uh, reduce people’s ability to commit, what if we’re not going back to work? What if, uh, the feds are gonna raise interest rates? You know, there’s a lot of uncertainty out there. And so maybe you don’t have your, your seller necessarily thinking, oh my gosh, there’s no way I’m going to discount my price.
So maybe now’s the time. To make the measured investments in million dollar domain names. So that’s what I’m looking at doing. Anyway, we shall see if we have any questions today, but those are my comments. I think million dollar domain names are our unique risk reward place, where you have some liquidity and some backstop to your value.
And I think million-dollar domain names, meaning short, scarce, quantifiable names like with their LinkedIn two or three or four letters, not all four letters, a million dollar domain names. Please do not hear me say that. Um, or because of their status as a popular dictionary word, are there places they’re a Sydney or a region or even a call to action?
I think that, I think that it is a place to store some capital inside domain names. As opposed to maybe a lot of people get into domain investing to create wealth, meaning you can start domain investing with $500 and you can buy 50 domain names. And if you can sell three of those for $2,000 a piece, you can turn your 500 into 6,000.
And if you can take your $6,000 and you can buy six names for a thousand dollars each, and you can sell two of those for 12,000. Now you’re at 24,000 of equity. So you’ve gone from 500 to 6,000 to 24,000. So I think domaining can be an effective way to grow wealth. And you kind of never looked back if you’re successful because you’re thinking, well, see, I started this mess with just a couple of hundred dollars.
So everything I own and everything I’ve made is all profit. The same point. If we get a hiccup in the business, And a lot of marginal names don’t have any liquidity. You know, there was a time when you look at what GoDaddy and buy domains were paying were poor for portfolios, they made value. If you send them a 3000 named portfolio, they made value a thousand of your names at $13 and say, we’ll offer you 15,000 for your 3000 named portfolio.
You know, there’s been times when there hasn’t been any liquidity for, for maybe lower price names. But I think some of the higher price names, if you buy them, right. There’s always been some level where there was liquidity and, and there, there were willing buyers. So that’s the risk profile of the type of names.
I think that lend themselves well to securitization. And that’s what I wanted to just finish up from talking last week on, and then starting next week, we’ll get back to what we normally do on million dollar domains. So we talked about what are the best million dollar names. What are some of the trends going on in million-dollar domain names, and next week, we’re going to have some reporting, some great reporting that was done on the exact person who paid hundreds of thousand dollars for a domain name.
And what’s your thinking was behind that. So I wanted to kind of put securitization to bed here, uh, this week after talking about it last week, want to see what people were thinking during the week after I presented it last week, I got a sense that most investors in the domain space, which I know make up a big part of my clubhouse audience, that they were like, nah, page, we don’t want to do that.
You’re probably ripping us off. It’s probably going to be a bad deal and that’s fine, but I still need to kind of cut my teeth in this space with some of the objections on me and get, cause I think I will deliver an attractive investment opportunity for people to be passive and just sit back and say, no matter what they’re doing on their own.
Investing in a partial share of domain name and a domain name means you get the economic benefits as if you owned all the name, but you don’t necessarily have to be dependent on the specific name that you’re able to buy yourself up against thousands of other investors. You get to maybe have a more diversified portfolio of better quality names without having all your eggs in one or two baskets.
Like for me with 50 stocks. Now, I know that’s not the best one we’re domain names. Some people may even say it’s not even a one word domain name. It’s a plural. I’ll never invest in plurals. But for me, whether I make money in big one word English, domain name, a lot of it’s going to depend on whether the specific domain name I bought fifties.com goes up in value.
So there could be cases where one word, domain names double or triple this year. And I’m not really guaranteed that my fifties is going to double or triple. But if I had investments in five or six other domain names that were maybe more generic. We’re uh, at different risk profiles, then I might get some of that return to the same point.
Every investment has risk. You could lose money buying partial shares of domain names. And you may find that at the end of the year, your securitization investments did terrible. That, you know, even though you can get, you can trade liquid on your shares to share you paid a thousand for, uh, the highest bid for it is 450 bucks if you had to get out, but your individual domain names are doing better and that may happen.
But anyway, that’s my take on securitization and I want to be able, you don’t have to necessarily comment on that. You can talk about your plans for 2022 and when. For those of you that aren’t investing in names that are 20,000 and above hoping to sell them for a million, whether there is any desire. You know what I mean, to own part of those names or whether you are, you still say I’d rather own it myself.
I want to pursue a strategy to do it myself. Anyway. Hi Mike Gilman. You’ve been a great follower of my shows and a participant. I appreciate your perspective. How are you, Mike? I’m doing all. I’m doing all right. Thanks for asking. Well, I think that’s a song, isn’t it? You know, I could make it into a song, but that this really isn’t the room for, um, I’m thinking like a, uh, I’m thinking there’s gotta be like a, a classic rock song I’m doing all right.
I’ll think of it by the end of the show.
Mike, if you were to consider investing in securitizations or parcelization of more liquid high value names after we talked last week, and maybe I shared a little bit this week, is that appealing to someone in your position as a domain investor? You know, it’s talking about your specific thing, but maybe you can see how a generic domain investor might look at it.
You know, it is a different way to, uh, invest more broadly, certainly. And, and I think that there’s, there’s an appeal for someone who has, um, a, um, a valuable name to, to get some benefit out of it right away, by selling off a portion of it, you know, where you’re, you’re, you know, moderating of course your gain, but, but taking something, you know, right away, like, uh, almost like renting out a property and, you know, while it, while it appreciates in value, so I could see where the appeal is.
And then, and then I start to think about it more. It’s like, okay, For me, would I want to lock up my name and then you get into, you know, the, the contractual agreements, the roadmap in the modern parlance of these rooms. Uh, what’s the plan, you know, is that in writing? Well, how do you, how do you know what the intentions are?
Uh, and, and who’s managing it, so, yep. All questions to be answered. I appreciate that. It’s interesting. I never thought about it that way. Um, I guess we’re so we’re so trained to see the other side and assume that they’re nefarious where they have an agenda, um, that, yeah, I wouldn’t see doing securitization or parcelization for me as a way to get out of my names.
Um, The deals that I would bring, and I assume others would bring, would mostly be where a name has come available on the market. And it’s, it’s tied up at a good price where somebody, the sponsor had to act quickly to take that name down. And then they bore the economic risk of whether or not they’d be able to sell shares.
And they would bear the capital risk until the investor’s money, paid them back for buying it. So I don’t see it as much that I would sell out my names to other people because then I would have to give them a subjective value. But I think what I would share with people is that it would be hard for 15 people.
To decide quickly whether to buy a name that was available for a short period of time and an auction or something like that. But if I felt like I had bought it at enough of a discount, um, that I would take it down knowing that my investors would most likely see the same discount I did. Does that change your perspective?
If I wasn’t cashing out by selling it to investors, it seems like that’s a, that’s an easier sell because if you have the names, you sort of have skin in the game, he bought it for a reason. You have this idea of its value. Now you have to sell the idea to someone else. Whereas if it’s something else and you’re going into a portion of it, maybe it’s a little bit more easy to be objective about it.
I think I said there, right? Yeah. That’s a good point because that’s, that’s kind of, you know, we have a very inefficient way. We trade domains. Um, And hopefully that gives us a discount to their true value that we’ve been able to profit from. Um, but it makes it harder when you get into big one word names.
Um, but then who, may you know, how, how far in advance do you make that decision? Or are we, are we trusting, you know, the, the page real estate investments, I mean, domain estate, investment trust, uh, management to just take our money on account and utilize it properly. Or do you pull everybody in the, in the group?
No, no, no, no. I would, I would buy the name and then take it down and then offer the shares. And in most cases I would have. Let’s say there was 15 shares. I would keep, I would own shares myself, but I would, I would have bought a name like today. And then in a week’s time, be able to say I’m selling, uh, 15 shares of a thousand dollars in this CV, CV.
Uh, you know, please send in your indications of interest and, and it would be fully disclosed. What the name was. It’s interesting. It’s interesting that you mentioned the other way. Most of you that are familiar with finance have heard of these things called SPACs S P a CS special purpose acquisition vehicles for corporations.
There we go. Sorry. Smacks special purpose acquisition corporations. And it’s funny because these used to have a really terrible reputation. They used to call them blind pools or reverse mergers back in the day where you could have a public company, um, that had a bunch of shares outstanding. It was trading at 0.001, and it could merge with a real company.
And I did a couple of these deals back in the internet bubble. And you could instantly take your company and say, you know, our equity, our company has bought this internet company like, like I did, and here’s our projections and the stock did start trading it, you know, you know, a dollar, $2, $3, $5, $10, wherever it went.
And rather than going through the. The security disclosure of going public. And I’m just talking here. Okay, everybody, please abide by all securities rules. Um, there was a sense that some of these companies can go public quicker by merging with a dormant public company, and then they would do all their reporting and they would file all their reporting and, and everybody would have all the information.
So what’s funny about the SPACs is they just kind of dressed it up and added a couple of zeros, but here’s what they do. Mike, you commit your capital to invest in a spec. So say you put a hundred thousand dollars in a, in a spec. When they picked a company to buy like black rifle, coffee just, just went public through a spec.
Everyone gets a chance to pull their money back out. If they don’t like the company. And what’s funny about it is, is the company that merges in there only they may say, well, how much money are we going to get? If we merged with this, with this spec, you know, this special purpose company. And they may say, well, 50 million, but it depends on how many investors pull out.
And it was funny because there was a recent one that went public. And I think it was Buzzfeed where Buzzfeed had the spec put at 50 million bucks and like 45 million other 50 million left and said, we don’t like the deal. So they ended up getting very little money. So that was one way I looked at, which is, which is a people put up the money.
Then once you buy an asset, they get a right to opt out. But I always thought that I would do it where if I ever did offer a securitization of an asset, it would be fully disclosed what they were buying and the price.
I was going to ask you page, if you don’t mind, Hey there. Hey, both doing, um, I was going to ask you, do you think, um, you know, maybe it’s best to start with one name, but I mean, and you get obviously some diversification by having a piece of that, but have you thought about pooling names? You’re talking about have an open end fund where you might go out and buy stuff.
If you had a pool that had a common, a common theme or not. Um, so that there’s diversification within the pool. Yeah, I think that I’ve thought of everything. I mean, there’s, there’s huge variations that you could do. And I think that when you do multiple names, you probably. Move, like we talked about last week toward where people want to feel like they’re investing in a strategy or in a plan or in a company, in a development company.
So that, in my opinion, that would be like investing in a development company. You know, you, you’re buying a piece of land and they’re going to build 300 houses on that land. You know what I mean? And so, you know, you’re going to make money over time as they sell the different houses. And I think that there’s going to be a place for those to come into play.
Um, for every thing you do, when you change the deal to benefit some people who say, Hey, we’d like to have a diversification, then you have other people say, no, I just want to buy one name. So I think there’s going to be a mix of things. But right now I think the easiest way to get started is a single name.
Um, And the way I was thinking about doing it, if I did a single name was that I might put in some terms that say, you know, as the general partner, you know, do I have to get everyone to agree to sell? And that’s been one of the tricky parts of owning names in common. And I would almost want to feel like there was a part of my role that said as long as I meet a certain minimum return liked in the first year would have to be three to one or better, you know?
And then the second year it might have to be, or the first two years that might have to be three to one or better, um, that it, it, if the investors want to also have decision rights, it changes the nature of what they’re investing in. And it does many times, uh, you know, bring about new rules and things like that.
So when it comes to selling. Right now I’m picturing a scenario where if I get a good offer and people want to sell then, or I’m sorry, and I want to sell the name, then the deal’s over and everyone gets their money back. Um, and I know this is going to be a source of contention because people are going to want a structure that works in every scenario and you can’t ever have a structure that works in every scenario, but, uh, we’ve got the makings of it that if you’ve got sort of a, a floor price that you’ve got the ability to do it, and if you wanted to sell it below that maybe you’d get permission from, from some percentage.
Um, but I, I understand that you want to have discretion on, and I was gonna ask you to on a, on a bigger name, you know, when it really isn’t a million dollar name, would you take the passive approach and wait for the person who has to have it, you know, obviously which maximizes it, but that could take forever, you know, or, you know, or would you have the more active staging, a domain name and, and going out there and, you know, maybe not getting 10 or 20.
Seven X on him, six, six figure names. I think you’ve identified it exactly. Bill the best way to get the highest price is to wait and be patient. And the hardest thing to do if you’ve caught an investment in a company is here that you’re supposed to wait and be patient, you know? Um, but I might say to my investors, let this be, if I did buy a name that was say $80,000 and we were putting it for sale for one to 5 million, um, let this be the investment that you’re patient with.
You know what I mean? Because you didn’t spend all the money, right. It didn’t take up 20% of your net worth that you have in domain names to buy one name. So, man, you were focused on getting out of that name and you would take a smaller, you know, multiple now it’s true that you could be aggressive and get your high multiple, but I would almost want to tell people, let the partials name be the one that you have patients with and maybe an offer does come that’s that’s 20 times what you put in and would only come by waiting for someone to want that name.
I’m not saying that there won’t be some type of efforts to try to sell the name, but I think we all agreed that’s when you get a real high, multiple is when someone comes at you and you keep saying no. Two to five, to one, eight to one 15 to one. And then finally you get down to that. Listen, I really don’t want to negotiate any more.
Can you, I know you’re tying to get a good deal on this name, but you know, really, I think this is the number I can sell it for. Can you meet this number? And it’s 20 times, you know what we paid for it, not telling them that and that maybe it would be easier in a passive investment where you only own part of the name to wait.
What do you think about that though? Uh, I guess you could have just different goals for different ones. Cause you know, obviously that could take quite a while or it could just happen. Um, or if you, like, you’re saying, um, you know, you do a white paper on it, you stage it and you know, you’ve got a lot of.
Prospects with deep pockets, you know, a bunch of them and you do an organized sale and, and create that demand. And hopefully, you know, it’s a good enough name you’re asking for bids. And, and, you know, if you four, five, I think I would probably put like a three year timeframe where I might let, Y might just like on wall street where a company decides to sell itself.
And it says, all right, our company’s for sale. You know what I mean? I think there’s also a point in time where the investment trust can say, you know, we didn’t get, it didn’t happen. We didn’t get lucky. We didn’t get the retail offers. After a certain amount of time. Now it’s time to sell the name. You know what I mean?
And get the best we can get, you know, and, and pursue retail buyers and, and, you know, and, and, and put it out there, you know, that it’s for sale. But I think if you think the essence of where you make the most money, maybe it is getting lucky and waiting and being patient. Um, so anyway, Hey Todd, happy new year.
How you doing? Did you have any comments on securitization or, or anything else about domains? Yeah. Bill, when bill brought up the point of a right, having multiple names, I know we talked about it last week, bill. I was talking about maybe having a portfolio of 1,004 letter and you buy in fractional ownership in that.
And then as I was getting the numbers ready for a call, I’m going to have with Paige. He doesn’t know what yet, I’m, I’m not, I’m going to be so prepared when I talk with him, he’s going to thank Todd hokey slowlier hotshot, because, um, I love that you’ve thought of everything page, and I know you have over the years and, you know, we have similar backgrounds and, and I love.
I love the idea. I want to be on the sales team, but I also want to help create. And what I mean is, so as I was doing my numbers, I was realizing, you know, these things are more valuable than I’m even then I’m even, I’m valuing them at meaning. So I may want to do maybe a hundred or 500 in a portfolio as opposed to a thousand, but it all comes down to the numbers.
So I like the option of here’s. You can invest in fractional ownership in a single name, or, um, you might like this type of investment. Now I’m going to let Paige as the, you know, the, the general partner that’s going to come up with the terms. I love that stuff. So that, um, you know, is, is something, I mean, to discuss, I was gonna, uh, just say, I know you thought of this page, but you know, it was like, so there can be say we’re raising money for this particular investment.
Here’s the minimum. We can go up to the maximum meaning if we, you know, If we only raised 50% of the money we expected, the project still goes forward. The partnership team just maintains, you know, more ownership in it. But I, I just, I love, I love the idea. I know, right? This is the year. I don’t really care how you structure it page.
I want to be on the sales team and I want to, uh, really, uh, cause I think these are going to be good investments for people. Meaning of course the partnership has to make sure they got to believe it’s a good investment for the investors and there’s a way to do both. So that’s why I’m interested in being, you know, getting into this further because I think it definitely can be a win win, and Mike brought up good points, but I just wanted to say, Hey, and I got a call at 11, but I had to jump in here.
Thanks for the room page. Appreciate it, Todd. I’ll probably say the most controversial thing. I’ll say all day right now. And that is if securitization of domain names. Whether it’s me or other people comes about this year. And next initially it’ll mean lower sales prices for domain names, but it’ll mean more liquidity.
And the reason I’m taking a longer term view toward this is I’m tired of being in an industry with no liquidity and huge, possible potential hypothetical profits. But the prices that we need to sell for have to be five to 10 to 20 to 50 times what we paid to pay for the period of illiquidity that we had to go through.
And there’s a chance that if there was 20 buying groups, buying names and owners of the names. They had liquidity offered to them. This has never been there. Yeah. They’re going to want to say, I’d be willing to sell page. I’d be willing to sell your partners, my names at their full value. And I’d be like, great, but we don’t want to PayPal that full value.
They say, well, you can’t expect me to sell them at wholesale. I’d say I understand. And I think what would first happen with new liquidity in our business is there’ll be a lot more transactions in between the wholesale price and the retail price of the name. And today, the only reason we’ve had a lot of transactions, there has either been because of expired names has been because we have.
Some brokers who do so much volume, that they do want to do deals in between the bid and the ask. We’ve had newsletters where people can price their names between what I call the bid and the ask. And I think we’ve had things like the recent aftermarket.com sale. And next week, we’re going to go over the results of that sale.
And I think that was a perfect example of what happens when you have an owner of one word domain names who puts them for sale at one specific time. And the values should be a little bit above wholesale with their reserves, but probably not approaching retail. And I think that those might give us some good numbers to work off of as to where the current.
By an ask is for some, one word com domains. In other words, what you have to pay to get one, and then what you might think you want to sell it for? Um, because there was a lot of interest, a lot of activity. There was a lot of publicity, but it was done in a short period of time, about 10 days. Um, so I think there still was a wholesale discount available, but I do think if securitization comes and parcelization comes, I think initially you may see more transactions at a in-between wholesale and retail.
And because our industry is so caught up in named bio and. Numbers like it’s E-bay that we don’t realize that we’re only seeing wholesale numbers and then we’re getting anecdotal retail numbers on DN journal. And then we’re asking people to try to figure out what domains are worth, in my opinion, based upon two completely different, uh, sales, uh, platforms, wholesale courthouse, auctions have expired domain names with no owner.
And then the very few publicly reported. Sales, which are normally done in confidence with nondisclosure. And we asked the people to say, what’s the domain name worth? And it shouldn’t be a surprise that people think they’re worth the wholesale prices because that’s all we show a mundane bio. That’s all they see.
So of course, they’re going to say that they want to buy as a retail buyer, the same price that wholesale investors get. And I call that the E-bay effication of domain names, and I saw it happen to baseball cards, saw baseball cards lose 90% of their value over 10 to 20 years because the pricing mechanism that people used was simply what was the lowest price that any seller was willing to sell this card for.
And that became the market price for that card that you had to sell out, sell at. And it wasn’t until the pandemic. We’re over the course of two to three months domains. I mean, baseball cards reverted back to what I think was their true value that was always there, but it’s just the constant barrage of liquidation value pricing on eBay.
Made people think that everything had lost a huge amount of value and it did if you need to get out of it. But anyway, I kind of opened up a new can of worms there, Mike and bill and Todd. Thanks for sharing today. Is there anything else you wanted to finish off with? Don’t send people to name bio that are your buyers, or you got that right.
You know, I had somebody negotiating with a name. I gave him a price and I gave him some, I gave him some comps. I didn’t reference the sources. And one of the things he said, well, GoDaddy only puts the valuation at this. And so I responded with, well, the GoDaddy valuation tool is one tool that. You know, that is, you know, I word it somehow.
It’s like, it’s a tool, but that doesn’t necessarily, you know, it’s not the be all and end all of valuation, you know? So there was a retail buyer buying the name from me who used GoDaddy’s valuation, you know, to pitch to me, to get me to lower my price, but we held and sold it for what we asked. Yeah.
There’s no doubt. Mike, I’m trying to buy a house here in my little town of, uh, in Tennessee. And there’s a house that, you know, it’s probably worth about 420,000 and it got auctioned off over the weekend for three 40 and the person who auctioned it, bought it on the courthouse steps for 2 65, 3 weeks ago.
And as a buyer, I would love to say, well, I’ll pay 2 65. But I wasn’t willing, and I didn’t know how to go to the courthouse, steps, plunked down, full cash. You know what I mean, as is where is no disclosure, no, disclaimer, a complete mystery, nor did I want to be someone buying in an option. That’s all cash.
Um, no disclosure, no nothing. You know what I mean? And so I think that real estate, which is kind of liquid in the sense that you have a lot of comps and everything, even it trades for these huge discounts based upon the platform, the venue, uh, and things like that. And, and so why should we expect something that’s even more liquid, like domain names to have different valuation metrics.
So I agree with you. And, uh, and hopefully the article I talk about on Monday, uh, on Monday domain, That is a great summary of the premium domain named business. I’m going to go back through and see if it references that if it see, if it references the question of, you know, most of the internet, now that Google likes to serve up or answering questions, if you’re a content writer out there in the domain space, and you can write articles, like what should I pay for a domain name?
And how was the price of a premium domain name, determined? That’s the type of content I would retweet and share and give people, you know, want to, uh, amplify I think is the current word in social media. Um, because I think it would help people not look at articles that were done a long time ago or that were done by GoDaddy.
So thanks Mike, Mike website, how much is the domain name, where it’s dot com. So check that out. As a member of domain academy, I probably should have known that
how much does a website worth.com is a domain name.com the domain name. Gotcha. Thanks Mike. Hope you have a great week. I always appreciate your contributions. All right, everybody. I will see you next week on million dollar domains, and we’ll be back to talking about available million dollar domains. Uh, talk about maybe have a broker, maybe have a domain name owner, but most importantly, next week, we’re going to go over the buy-side and what a buyer of a million dollar domain name was thinking when they shared, they shared their thoughts publicly.
And I think it’ll be insightful for everyone to, to, to, to go through that. So that’ll be next week on million-dollar, uh, domains. Let me see if anyone else has something to share. I had a couple of requests.
Let’s see Mikey and Aram Tata. Did you have something you wanted to share?
Nope. All right, everybody. I see out there on the internet. See you next week. Bye-bye thanks. Thanks bill. I’ll figure out how to close it. That’ll do.