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.