Rejected: $6M Offer for Cricket.com
Communicate.com rejects $6M for premium domain name.
Domain name company Communicate.com (OTCBB: CMNN.ob) rejected a $6M offer for the domain name Cricket.com, according to an article in Kiplinger magazine.
The article by columnist Andrew Feinberg picks Communicate.com as a “smart speculation” but also uncovers more details about the growing company. The article is likely the reason Communicate.com’s stock price soared 38% last week to close at $2.70 per share. With microcap stocks, a little bit of buying activity can move stocks quickly.
According to the article:
-Communicate.com is planning a name change (smart move, it doesn’t make sense for what the company has become)
-The company owns 1,100 domain names
-The company turned down $6M for Cricket.com because it wants to develop the domain. ESPN paid $35M for CricInfo.com, a leading cricket site.
-Feinberg argues the company is probably worth 50% more than the previous $1.97 trading price because of the value of its domains, the $7M it has in cash, and that its leading site Perfume.com did $10M in revenue last year. Of course, much of that 50% has been realized over the past week.
-Feinberg points to the strong management team as a key indicator of future success
-The company plans to raise $15M to $40M in a stock offering in the first half of 2008
Cricket.com used to be a parked page with ads for mobile phones and a disclaimer that it wasn’t affiliated with Cricket Wireless. Cricket Wireless is a popular low-cost wireless service from Leap Wireless (NASDAQ: LEAP). I wouldn’t be surprised if Cricket Wireless made the $6M offer for the domain. The company’s domain name is MyCricket.com. No joke.
The parked page put the company in sketchy legal territory, so it is good to see that it now has a “coming soon” page at the domain.
In May of 2007 I predicted that Cricket.com could sell for over $1M. Look for pay-per-click revenue to decline as Cricket.com was the company’s top grossing parked domain name. But it’s all part of the company’s strategy: parking is just a way to generate revenue while developing domains into destinations.
[Please see disclosures.]