Re: [gnso-vi-feb10] A 2% cap applied to the existing, competing RSPs, as RO applicants

[Jon Nevett <jon@xxxxxxxxxx>]

Eric:

I'm not commenting on the point you are trying to make only to say that your 
numbers are way off on the registrar side.

Netsol's market cap is not even in the neighborhood of $1M.  If you believe the 
WSJ, it is closer to $1B than $1M.  Go Daddy's quarterly cash flow in 2010 must 
be much higher than $14M by at least 4X for domains alone -- let alone all of 
the other goods and services that they provide.  With all of the notes flying 
around, we need to be sure of the accuracy of stats that we circulate.  

Thanks.  

Jon
    


On Jun 6, 2010, at 1:23 PM, Eric Brunner-Williams wrote:

> 
> Colleagues,
> 
> Verisign has 182.50M shares outstanding, currently selling in the
> $28.15 to $29.15 price range, for a total market cap of 5.16B.
> 
> To create a registrar holding of VGRS equity sufficient to meet the 2%
> test will require one or more registrars to acquire approximately
> 3.65M shares, at a cost of $105.85M.
> 
> In August of 2008 GoDaddy announced a quarterly cash flow of $14M.
> 
> TuCows reported a net revenue of $20.4M for 1Q2010.
> 
> NetSol currently has a market cap of $1M.
> 
> I've no idea what eNom / Demand Media has on hand, but I suspect it
> has higher ROI goals than a wasteage buy of VGRS equity.
> 
> So I conclude that VGRS will not be affected by a 2% cap, as it would
> cost GoDaddy alone almost two years of cash flow, some of which arises
> from the sale of VGRS inventories.
> 
> As for NeuLevel/NeuStar, I'm not in a position to offer informed
> comment. It too may be unaffected by a 2% cap.
> 
> Afilias is affected by a 2% cap.
> 
> CORE is not, absent an purposed reading of a nuance, having 60+
> independent voting members of the association.
> 
> The 2% cap appears to eliminate at least one of the four principle
> RSPs as applicants to obtain or add to their existing inventory of RO
> contracts, while leaving the incumbent monopoly unified RSP-RO
> unrestricted.
> 
> The "zero cap" articulated in Board Resolution #5 at Nairobi would
> affect all four RSPs, as would any cap smaller than a 0.0002% cap,
> which is about $1M as an investment in VGRS by one or more registrars
> interested in preventing VGRS from escaping the effect of a cap rule.
> 
> I've written this in response to the observation that "... if safety
> from possible harm is our primary concern then we must stick with the
> DAGv4 implementation ...", as independent of the effect this cap has
> on entities we do not know exist, it has a clear effect on entities we
> know do exist, eliminating at least one, and promoting at least one,
> with no discernible correlation with harm, though with obvious
> correlation to market share.
> 
> Eric