Stock markets were up nearly 10% on Friday, and it was a sigh of relief in a tumultuous period.
Stocks have been pummelled as the world goes into hiding over fears of the COVID-19 outbreak. The Dow 30 is down 22% since its peak on February 12. The S&P 500 and NASDAQ are both down 20% since their peaks on February 19.
And those numbers looked a lot worse the day before.
Here’s how domain name stocks have fared from their 2020 peak through Friday’s close:
Verisign (NASDAQ: VRSN): Verisign is off 16% from its high on February 6. It makes sense that the stock wouldn’t be as hard hit as the overall market. It delivers consistent, subscription-based revenue that is likely to go up as it’s allowed to raise prices.
Tucows (NASDAQ: TCX): Shares in the company that owns Enom have dropped 29% from their peak on January 16.
GoDaddy (NYSE: GDDY): GoDaddy’s value has fallen 30% between February 14 and now. I’m curious about what impact the economic and social changes of the novel coronavirus will have on domain name registrars and hosting companies.
Endurance (NASDAQ: EIGI): It’s a demoralizing time at Endurance, a rollup of domain name and hosting companies. Shares peaked this year on February 6 and have fallen by 57% since then. Is it overdone? Endurance’s management thinks so; it authorized a $40 million share buyback plan on March 10.
CentralNic (London AIM: CNIC): I hesitated to include CentralNic and the next two companies in this post. They are thinly traded so changes might not reflect the current market. But CentralNic’s shares are down 24% from a peak on January 2.
MMX (London AIM: MMX): New top level domain operator MMX (Minds + Machines) has seen its stock fall 25% from its peak on February 7.
NameSilo (OTC: URLOF): Shares in this registrar are down 50% since January 9. You have to give NameSilo some props for this well-timed sale of bitcoin, though.
This might present a buying opportunity if you think the world and market will rebound soon. I do not own individual shares in publicly-traded domain name companies to avoid a conflict of interest. Mutual funds I own, including index funds, do hold some of these stocks.
Ray Chai says
Bitcoin dropped 50% and slowly up again
Dave Tyrer says
“I do not own individual shares in publicly-traded domain name companies to avoid a conflict of interest.“
Hey Andrew there is no need for you to refrain from investing in domain related equities. Just add a disclaimer. It’s quite mainstream for financial writers to write about stocks they also own. It’s perfectly ethical.
For example this Morningstar article:
Since the author has a position in one of the stocks mentioned, Quest Diagnostics (DGX), a disclaimer is added at the very end:
“Karen Andersen has a position in the following securities mentioned above: DGX.”
Andrew Allemann says
Dave, I appreciate your thoughts on the issue. I decided it’s just easier this way. And with so many domain companies going private in recent years, there aren’t that many companies to invest in anyway 🙂
Endurance is losing money, little revenue growth and a tonne of debt. Where is the upside in that story?
There is no value in just buying up random companies and hoping.
Share buyback is desperate. It could be one to short.
Rubens Kuhl says
GoDaddy is focused on small businesses, and those are expected to be hit harder than larger companies.
Agree, that is the obvious risk for Godaddy, growth rate will probably get heavily hit in a recession.
Very nice post