Saturday, August 13, 2005

Weekend Reading:

Interesting shakeup going on right now at domain registrant

The once hi-flier fell flat on its face to $5 a share after the technology-engineered Bubble of the 90s popped.

Since then, the bloated company has been trying to cut costs and restructure while still operating as a public company.

It hasn't been easy, to say the least.

Shareholders have been patient with the company, who's embroiled them in an endless management rotation that's now coming to its end.

At least that's what the massive stock purchases by private investors (Mark Cuban, the Mavericks owner and Net stock fiend billionare) and private equity firms (Vector Capital recently bid for the company, but Barrons reported this morning that the deal has a slim chance of being approved) would have us believe.

With insiders owning so little of the stock, a buyout by someone like Cuban is definitely possible.

Like many of those looking into the fishbowl, what Cuban sees is excess and misdirection plaguing a company with great earnings potential and little debt.

Cuban's comments in Barrons this morning were very telling and forbode several more aggresive counterattacks from his camp in the near future:
The company is incredibly bloated...If you normalize the numbers...there's incredible upside...The smart money knows how poor the board and management has been...Anyone who can buy the company anywhere near this price can come in, bring in new people, and leverage the upside.
Cuban owns more than 3 million shares of, roughly 14% of the company.

He opposes the Vector buyout, citing that "the $200 million offering price does not come close to fairly valuing the business of this company" and stating that the plan is a quick get rich scheme hatched up by insiders.

So what is the right price for

Maybe Cuban isn't saying because he's thinking so hard about it.

Does Cuban have the muscle to move in and buy himself?

The Net is, after all, Cuban's former forte: the current NBA posterboy earned his billions by selling his tech startup to Yahoo for an estimated $5.7 billion.

The story is sure to experience more turbulence over the next 2 weeks, that's for sure.

Stay tuned.

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