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05|03|2010 11:54 am EDT

Oversee.net Shares For Sale

by Adam Strong in Categories: News

Looking to invest in the domain space, but can’t find any good domains for sale?  How about buying stock in a company that owns over 600,000 domains, but also monetizes millions of domains and has auctioned millions of dollars in domains?   How about buying shares of Oversee.net ?

Up until recently you couldn’t buy these privately held shares, unless of course you wanted to dump millions of dollars in to the company, and even that could prove difficult.   Thanks to new sites like SharesPost.com you now can buy shares of many private companies like Facebook, Twitter, and now Oversee.net.

SharesPost currently has a few blocks of Oversee.net stock for sale with a per share price of $7.35.   The smallest block of shares available is 4,200 and priced at $30,870.  You’ll need to sign-up to see the current offerings.   (SharesPost requested that we take down the screen-shots of the current offerings)

The sale of these shares are subject to a few conditions such as first rights of refusal, a co-sale agreement and subject to  company share-holders agreement. We’ve been told that some of these shares are shares of long-time employees who are looking to take a little money off the table.

Interestingly, SharesPost includes an “implied valuation” of Oversee based on the estimated number of fully-diluted shares and the listed share price.   This number is just an estimate but it’s an interesting number.  It puts the valuation of Oversee.net at over $1.1 Billion.

SharesPost lists the description of the company as:

Oversee.net is a domain parking and lead generation company founded in 2001. The company owns one of the largest portfolios of domain names in the world. The company’s unique optimized technology connects consumers and advertisers with highly relevant advertisements. Oversee also serves as a primary and secondary marketplace for domain names.

Oversee’s revenues are reportedly more than $200 million per year. Headquartered in Los Angeles, the company has reportedly not taken any outside funding.

It looks like SharesPost has some outdated info as the description states Oversee has not taken outside funding, when most know and it has been publicly reported that they received $150 million from Oak Hill Capital Partners. It’s worth noting that Oak Hill, founded by oil-man billionaire Robert Bass, has invested in some of the world’s largest companies.  Maybe “going along for the ride” and owning shares along with one of America’s wealthiest men might be something worth looking into.

Something domainers who are heavily entrenched in the domain business may want to think about when owning these shares is that share owners often have information rights.  Insight into a $200 million domain company backed by big private equity could be valuable to any domainer in terms of providing valuable insight into how to run their own business.

Regardless, Oversee is a behemoth company with a portfolio of over 600,000 domains and runs, among other ventures, domain name registrar Moniker.com, domain auction house SnapNames.com, the DomainFest Global conference. They are probably best known for creating the PPC company DomainSponsor.com in 2001.  If you are a believer in the domain space and think that there is long-term value in a domain portfolio or simply find value in a company reportedly generating over $200 million a year in revenue, this could be a great investment opportunity.

If you want to invest in a company in the domain space, there are other opportunities and there may be more on the horizon.  Marchex and LiveCurrent are traded but they haven’t weathered the recent market climate well.  There’s also Tucows, which was recently mentioned on another blog as a “value investment”.   Photon Group which now owns Dark Blue Sea is publicly trade in Australia . Demand Media is also exploring a public offering and even registrar giant Godaddy.com explored the IPO possibility a few years ago.  Maybe even more shares of other private domain name companies will start popping up on sites like this.

For disclosure purposes, I do not own shares in any of the mentioned companies, but I am giving serious consideration to investing more in to the companies that dominate the domain space.

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10 Comments

andrew

May 3, 2010 @ 12:25 pm EDT

I seriously doubt Oversee would let someone buy the shares. The shares are probably highly restricted.

Fred Hsu

May 3, 2010 @ 1:51 pm EDT

Andrew,
Nobody has to ask permission to sell their shares. Shares are subject to a shareholders agreement and are in fact restricted – there are Rights of First Refusal and Co-sale requirements like many other companies Zynga, Facebook, Twitter, Linkin, eHarmony, etc. For more information, log on to Sharespost for a buyer’s account and you will see a sample purchase contract and exactly what those restrictions are. Good luck,
Fred

Adam Strong

May 3, 2010 @ 1:53 pm EDT

As I pointed out above, the shares are restricted by first rights of refusal and co-sale. I’ve also been told by shareholders that the shares are only restricted in that way. I’m sure the company has had their chance at buying these shares already as they are fully-vested.

Former Employee

May 3, 2010 @ 2:46 pm EDT

As I understand it, these positions are third-party owned currently and availble for purchase by anyone. The big question as mentioned above is whether Oversee would allow the transactions to go through. They can’t block a sale; they can only purchase the shares themselves. If that happens, the employee still benefits, but a new third-party holder does own them.

At this share price and this volume, the company has little downside for the transaction not to go through. It looks good to have the company independently valued at a billion. The only reason the company might not allow the sale is that shareholders are generally granted visibility into the company that a closely-help entity might not want to share. (At least that’s how I understand things.)

I do not own any shares, so it doesn’t benefit me, but there are some great people who do deserve a little something.

andrew

May 3, 2010 @ 3:09 pm EDT

@ former employee – I recall the shares I had in a company I worked for about 10 years ago had more restrictions. One reason Oversee might step in is if one of the employees is only selling a portion of their shares. This would result in an extra shareholder on the books. If the shareholder list gets too big they have to publicly disclose financials. (at least that how it was 10 years ago).

Josh

May 3, 2010 @ 3:09 pm EDT

I’d gladly buy shares but like OS its probably a better roi to reg or snag tm names all day. You cannot truly value a company without full disclosure.

To take this serious youd be as good as going on Shark Tank or Dragons Den with a business plan that involved TM infringment and think theyd like it.

Kep your $30k, do what OS does and get a 50% roi annually without all the overhead.

black humor

May 3, 2010 @ 6:46 pm EDT

Why I don’t trust those kind of companies?

Is it only me?

Buy domain names

May 14, 2010 @ 7:06 am EDT

There are several ways through which we can earn money through online and your article regarding earning money online was very informative and please keep posting blogs like this thanks.

dantel modelleri

May 14, 2010 @ 6:25 pm EDT

I seriously doubt Oversee would let someone buy the shares.

icgiyim

May 15, 2010 @ 6:47 am EDT

hey can’t block a sale; they can only purchase the shares themselves. If that happens, the employee still benefits, but a new third-party holder does own them.

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