Bingo.com Ltd Buys Out Bingo.com Payments for $900,000
Friday, September 3rd, 2010
Nearly a century of royalty payments bought out.
Bingo.com, Ltd has bought out its remaining royalty payments on the domain name Bingo.com for $900,000 in equity.
The company had a deal with the prevous owner of the domain (Bingo, Inc) to pay it 4% of gross revenue through 2098. An independent valuation pegged the present value of those payments at $1.4 million to $1.6 million.
If you’re thinking that Bingo, Inc needed cash and that’s why it took a discount, think again. It took the payment in the form of 6 million shares of stock. As a penny stock, these shares aren’t very liquid. Also, the current trading price of the stock is 9 cents instead of 15 cents, which is the valuation that turned $900,000 into 6 million shares of stock. At 9 cents the value is $540,000.
After the deal, Bingo, Inc now owns about 30% of Bingo.com, Ltd.
Further Reading:
Taking the stock didn’t work out for everyone back in 1999/2000. Hopefully it works out better for the Bingo group. Penny stocks can be risky!
@Domain Report
Not only that but they are not subject to the same SEC requirements and are often shell corps which can dissolve as quickly as they appear – dumping all their liquid assets then selling at bankruptcy in a private auction to… themselves!
the day that I sell a domain at this price I can start develop all my innovative IT projects!