Lawsuits disclose more details on Coins.com and Invest.com domain sales.
I’ve been running down a rabbit hole today after John Berryhill tweeted about a lawsuit over Invest.com.
— John Berryhill (@Berryhillj) September 14, 2020
There were news reports in 2014 that Invest.com had sold for $5 million. But a lawsuit (pdf) filed in 2018 sheds more light on this sale.
The background, according to the lawsuit, is that Adam Perzow’s firm Heath Global bought the domain name for $2.0 million on a payment plan. Heath Global filed for bankruptcy while still owing over $1.9 million on the domain. It then renegotiated the right to purchase the domain to $2.5 million paid over time.
Perzow entered into an agreement with a third firm to sell his right to acquire Invest.com. It’s not entirely clear how much this was for; the buyer agreed to pay the $2.5 million, plus up to $0.65 million more including some services Perzow was to provide.
The sale that was reported for $5 million was this third party’s acquisition of Perzow’s domain acquisition right.
To Perzow, the cash was only part of the deal. He said he also had an arrangement with the buyers to enter into a venture with them for using the domain. (A dispute about this alleged agreement led to the lawsuit.)
But the net-net for readers is that Invest.com didn’t sell for $5 million. It’s also not clear if the entity that bought the domain from Perzow completed the payments and owned the domain.
Which led me to Coins.com. Perzow was the buyer through another firm, Hamstead Global. He bought it for a seven-figure price tag in 2018.
But Hamstead Global filed for Chapter 11 shortly thereafter. The bankruptcy case unveiled some of the details behind the purchase. The actual purchase agreement was for $1.7 million and Hamstead filed for bankruptcy after making its first $300,000 payment.
Stack’s-Bowers Numismatics, which sold the domain, got into a fight during the bankruptcy case, noting that Hamstead didn’t actually “own” the domain; it was still in escrow until all payments were made.
The parties ended up entering into a settlement agreement in July, in which Hamstead agreed that it still owed $1.4 million on the domain. According to Perzow, Hamstead Global has now made additional payments on the domain beyond the original $300,000.
Reminds me of the “fake news” $50million sale of 88.com. People are just startIng rumors when a domain transfers to try and pump the domain market.
Yep, unless you see copies of the escrow, court, SEC, or other verifiable sale documents, you can’t believe what you read.
This happen all day every day…particularly in a troubled economic environment. Somewhat interesting…. but certainly not shocking.
Invest.com was not a domain sale. It was a sale of the entire Invest.com business.
They didn’t appear to do anything with the old business
I read the lawsuit PDF via your link. I don’t have a lawyer and hardly ever use contracts, but even to me this seems like a crazy deal. While it seems clear (at least in Perzow’s opinion) that this was a partnership, it is very strange they did not work out the details of the ownership percentages (or profit share) ahead of time. While I might be ok with not having a formal partnership agreement, I would at least want to know some specific terms ahead of time, rather than just a vague promise. Even if this had resulted in the 2 parties working together on the site as planned, it may not have been enough money to make it worthwhile for Perzow to do the deal, so I don’t know why he decided to do it in the first place. It does seem he got screwed in this deal, so it will be interesting to see what happens.
Yes it sounds like Perzow got screwed but also teaches one to dot their “I’s” and cross their “t’s” beforehand (and also to not rely on promises and/or performance of an international counter party unless the domain is controlled via escrow until all aspects of the deal are received/actualized)
$1.7 million for Coins.com is a steal! The domain is worth $5-10 million post-covid IMO.
5 to 10 mm at the very least !
$10 million+ before pandemic.
Respectfully, i think the net beneficiaries to the pandemic have been gold (and other physical metals) and also digital coins and assets (including cryptocurrency).
I would make an argument that these categories, in terms of domain names, have gone up in value significantly post pandemic.
The pandemic has been a great catalyst to the era of digital currency.
The bitcoin market has been dead for years, nobody is going to pay that.
The other problem is that the plural doesn’t make a lot of sense, because the plural of bitcoin is still “bitcoin”.
What crypto company would actually use this? It is still basically a coin collecting name in my view.
Coin.com is the one that makes sense for the space.
Highly disagree.
Only a newbie would talk about the crypto world in terms of the 2017 hype stage being the “big moment”.
In fact:
1) bitcoin market is rockin’ these days. Was recently back at $12,000
It’s best days are still ahead by far.
2) the bigger area, however, are in digital “stable coins” and are the single biggest growth area in crypto these days ….in the trillions.
For this reason,
“Coins”, Plural, is so much more valuable for this fact alone.
I like the plural version much better also.
Same here. Plural is way better.
The market has halved, it never came back to 2017 levels.
There is no history of plural bitcoin names selling for significant amounts (because they make little sense), even in 2017 they didn’t do well compared to the singular.
“Stablecoins, today, are largely just digitizing dollars. Similar to how Craig’s List started digitizing classified ads 25 years ago. It turns out, things have more utility when they’re digitized. And the digitization of dollars represents a massive opportunity because it’s a huge and growing market with modest digitization to date.”
https://www.google.com/amp/s/www.crowdfundinsider.com/2020/05/162065-stablecoins-could-reach-1-trillion-market-cap-in-5-years-according-to-experienced-venture-capitalist-focused-on-blockchain-space/amp/
hi, interesting could you explain why the bitcoin market has been dead for years ?
You really need that explained?
There is a difference between Bitcoin and the cryptocurrency market. And also the blockchain industry is different. While none of it has taken off big yet, there are a lot of companies with VC funding in that space who might want a domain like coins.com. Because with crypto in particular, credibility is everything, and that would give instant credibility.
Most definitely Mark!
“most definitely” in terms of what ? (what are you responding to?)
Never underestimate a man with a few hundred grand and a dream! And no real viable business plan.
Regarding Coins.com: Coins are metallic fractional currency. Banknotes carry more value than coins and are more light to carry, carruy more artistic value and security features. I wonder Banknote.com or Banknotes.com would they sell for a similar amount or for more? Seems like those are owned by Banknote Corporation of America who prints money.