J Carlo Cannell, the activist investor who has been circling Rightside for the last year or so, was unimpressed with the company’s recent sale of eNom to Tucows.
In a letter published as a Securities and Exchange Commission filing last week, Cannell announced that he has started up a support group for fellow “concerned” investors.
In the distinctly loveless Valentine’s Day missive, Cannell called for Rightside to be acquired, go private or issue a big dividend to investors, and said he intends to campaign to have the board of directors replaced.
On the eNom sale, Cannell wrote that the $76.7 million deal “marks a step in the right direction” for the company, but that he was “not satisfied” with the price or the $4 million legal fees accrued. He wrote:
Conversations with management suggest that the Company took only two months to evaluate and close the transaction. Perhaps if they had been more patient and diligent, shareholders would have enjoyed more than the 0.5x 2016 revenues which they received in this “shotgun sale”.
This price was a fraction of Tucows’ own valuation of 2.6x 2016 estimated revenue. For the two trading sessions following the eNom transaction, NAME traded up 10% while TCX was up 32%, suggesting that investors believe it was a better deal for TCX shareholders than NAME shareholders.
The deal was described at the time by Tucows’ CEO Elliot Noss as an “individual opportunistic transaction”.
Noss later told analysts that the eNom business was floundering, “a flat, potentially even slightly negative-growth business”.
Cannell said last week he has formed Save NAME Group, named after Rightside’s ticker symbol, as a means to exert pressure on the board.
He said it is currently “difficult to justify” the company remaining publicly listed, and that the “sale of the entire company” or a “special and substantial dividend” could help appease shareholders.
He said Rightside agreed last August to let him name a new director, but has dragged its feet approving his suggestion, adding:
SNG intends to become more active and vocal in its efforts to force change at NAME. SNG has compiled a slate of qualified candidates. The names and identity of these candidates shall be disclosed periodically together with other neutral and reliable facts to support the contention of SNG that some or all of the board of NAME needs to be replaced.
Cannell, who owns about 9% of Rightside, first emerged as a critic of the company a year ago.
At that time, he called for the company to ditch its “garbage” new gTLD registries in favor of a focus on its higher-margin eNom business.
He was supported by Uniregistry CEO Frank Schilling, then also a Rightside investor in addition to a competitor.
The .com domain is still the runaway leader TLD for phishing, with new gTLDs still being used for a tiny minority of attacks, according to new research.
.com domains accounted for 51% of all phishing in 2016, despite only having 48% of the domains in the “general population”, according to the 2017 Phishing Trends & Intelligence Report
from security outfit PhishLabs.
But new gTLDs accounted for just 2% of attacks, despite separate research showing they have about 8% of the market.
New gTLDs saw a 1,000% increase in attacks on 2015, the report states.
The statistics are based on PhishLabs’ analysis of nearly one million phishing sites discovered over the course of the year and include domains that have been compromised, rather than registered, by attackers.
The company said:
Although the .COM top-level domain (TLD) was associated with more than half of all phishing sites in 2016, new generic TLDs are becoming a more popular option for phishing because they are low cost and can be used to create convincing phishing domains.
There are a few reasons new gTLDs are gaining traction in the phishing ecosystem. For one, some new gTLDs are incredibly cheap to register and may be an inexpensive option for phishers who want to have more control over their infrastructure than they would with a compromised website. Secondly, phishers can use some of the newly developed gTLDs to create websites that appear to be more legitimate to potential victims.
Indeed, the cheapest new gTLDs are among the worst for phishing — .top, .xyz, .online, .club, .website, .link, .space, .site, .win and .support — according to the report.
But the numbers show that new gTLDs are significantly under-represented in phishing attacks.
According to separate research from CENTR, there were 309.4 million domains in existence at the end of 2016, of which about 25 million (8%) were new gTLDs.
Yet PhishLabs reports that new gTLD domains were used for only about 2% of attacks.
CENTR statistics have .com with a 40% share of the global domain market, with PhishLabs saying that .com is used in 51% of attacks.
The difference in the market share statistics between the two sets of research is likely due to the fact that CENTR excludes .tk from its numbers.
Again, because PhishLabs counts hacked sites — in fact it says the “vast majority” were hacked — we should probably exercise caution before attributing blame to registries.
But PhishLabs said in its report:
When we see a TLD that is over-represented among phishing sites compared to the general population, it may be an indication that it is more apt to being used by phishers to maliciously register domains for the purposes of hosting phishing content. Some TLDs that met these criteria in 2016 included .COM, .BR, .CL, .TK, .CF, .ML, and .VE.
By far the worst ccTLD for phishing was Brazil’s .br, with 6% of the total, according to the report.
Also notable were .uk, .ru, .au, .pl, and .in, each with about 2% of the total, PhishLabs said.
DNS Belgium, operator of .be, has moved its shared registration systems to the cloud, the non-profit said last week.
The registry migrated from a self-hosted system to Amazon Web Services on February 11.
It’s an effort to cut costs, increase efficiency, and free up engineering time currently dedicated to non-core functions such as hardware maintenance, executives said.
“As AWS sees to the hardware, connectivity etc., DNS Belgium can focus on the layers above, such as the software,” general manager Philip Du Bois said in a press release.
Business development manager Lut Goedhuys said that while the system has been moved to the cloud, AWS allows customers to select the data centers where their applications will be stored.
DNS Belgium picked Ireland, she said.
GoDaddy’s domain sales topped $1 billion for the first time last year, CEO Blake Irving told analysts this week.
The milestone was revealed as the registrar reported its fourth-quarter and full-year 2016 earnings late Wednesday.
In the fourth quarter, the company had a net loss of $800,000, compared to a year-ago loss of $500,000, on revenue that was up 14.2% at $485.9 million.
For the year, its loss was $21.9 million, compared to $120.4 million in 2015, on revenue that was up 15% at $1.85 billion.
GoDaddy also breaks out its revenue by segment, showing that domains revenue was up 11.2% at $242.5 million for the fourth quarter and up 11% at $927.8 million for the year.
Domain “bookings” — a somewhat informal measure that gives an indication of cash sales from domain names (as opposed to revenue under GAAP accounting) — surpassed $1 billion for the first time, Irving said.
Today blah blah ZA Central Registry blah blah .africa blah delegated blah.
ICANN blah blah root blah. Blah blah ZACR blah nic.africa.
Blah blah five years blah blah contention blah lawsuit blah blah DotConnectAfrica blah. Blah blah Bekele blah IRP blah.
ICANN blah blah Governmental Advisory Committee blah blah blah African Union blah blah blah.
Blah blah Geographic Names Panel blah blah controversy blah blah blah blah lawsuit blah blah blah leg to stand on.
— dotAfrica (@africandomain) February 15, 2017
Blah racist blah blah conspiracy blah blah blah… nutty. Blah.
Blah reporting blah damned blah story blah forever blah blah bored blah blah blah blah.