Clek Media Inc. (”?Clek”?) today announced that it has brokered the world-record sale of the domain FUND.COM for US$9,999,950 in an all-cash transaction. Clek, a media consulting firm, represented the seller of the domain, assisting in both the negotiation and closing of the transaction. The buyer is Fund.com Inc. (OTCBB: FNDM), a New York firm previously named Meade Technologies Inc. To date the buyer has revealed their plans for the domain mostly in filings with the US Securities and Exchange Commission.
Clek believes that the nearly $10 million purchase price for FUND.COM represents the highest price ever paid for an Internet domain. The purchase price tops what the Guinness World Records books report as the highest previous price, the memorable BUSINESS.COM purchase. Ex-Disney executive, Jake Winebaum of eCompanies Ventures, acquired BUSINESS.COM for $7.5 million in 1999, which created some public media controversy at that time for the seemingly high price. However, in July 2007 BUSINESS.COM was sold to yellow pages publisher, RH Donnelly, for $345 million, 47 times the purchase price of the domain.
Press release here.
Additional reading material here and here.
People and companies involved (from SEC Filing):
Music Nation’s Daniel Klaus and Lucas Mann, and a number of other companies.
More info on DNForum thread, DomainState, NamePros, and various domain blogs.
As others, I had my doubts about the truth of this transaction when first saw it hence waited to look into it a little more (reading message boards, blogs, made few calls). I’m still not sold on the idea it is 100% legit (although hopeful it is). Time will tell.
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I still don’t like this one…
I don’t trust companies that went public through reverse mergers. Did you see what this company they merged through did? Tax advice. The shell company that was involved had a whopping $6,249 of cash as of September 30, 2007 and had about $30k in revenue for the 3 months ending then.
The $20M capitalization they received was through a key shareholder’s bank.
The investor relations company’s Justine Sacco, confirmed the sale for the domain “and related IP”. And they filed with the SEC on the transaction.
It’s possible that they received funding, went public through the reverse merger, and bought the domain, but I have my suspicions that this is the full story.
Anyone know if this Equities magazine they now sell was part of the transaction? Perhaps that was the related IP.
I would be more than happy to read through the SEC material and basically reverse engineer this transaction through whatever I can get my hands on. Basically, if a bank was willing to give them $20 Million and they used that to fund the purchase then it is legit. Someone had cash backing up the $20 Million loan. Banks don’t loan that much without someone or something behind it. I have seen instances where banks wanted greater than 100% collateral on loans for unusual items.
The reverse merger is a little worrisome, but it is also much cheaper and quicker than an IPO.
For those who do not know what a reverse merger is, a private company buys/merges with a publicly traded company and then the new entity changes it’s name whatever they want, and poof, you have a pubicly traded company. Issue 10 million shares at $5 a piece and you have a company with a market cap of $50 million.
Thanks for the info Sahar - I’ll try to report back soon.
I could’nt agree more with Steve and Andrew regarding Reverse Mergers. It seems that the “world’s greatest domain sale”? has been brokered by a company that has no web presence, at least not as of this writing. I cannot find any info on Cleck Media Inc., the company that was reported to have brokered the deal, other than press releases. A whois search on clekmedia.com and clekmediainc.com produced the following results: both were registered within the past 24 hours, both with private registrations. One is parked at Domain Sponsor and one is for sale. While this is a common occurrence, riding on the coattails of news releases and both are most likely not related to Clek Media, it still brings to question the lack of web presence for Clek Media. Does anyone have any information on this company? DN Journal reported it “confirmed”? the sale. With so much at stake here, when is a reported sale considered a sale? What is considered “confirmed”?? By whom and according to who? Bogus press releases are commonplace and often revealed in domain forums, often months after the original release date. While I have no reason to believe this sale to be untrue, it would be nice if there were some sort of standard on confirming sales.
Ok, asides from 10 million being unreasonably high IMO for fund.com, what about sex.com which sold for more than 10 mill? How can they now push a PR of being the highest sale ever? This all looks suspicious to me…
The press release does say that it is their belief that it is the highest sale ever.
“Clek believes that the nearly $10 million purchase price for FUND.COM represents the highest price ever paid for an Internet domain. The purchase price tops what the Guinness World Records books report as the highest previous price, the memorable BUSINESS.COM purchase.”
According to Ron Jackson “Sex.com is believed to have gone for more but the exact price - estimated to be between $12-$14 million - was never released.”
Overall, even if they used some financial engineering - it is good press for the domain industry. Mainstream media is seeing the value of the domains.
I’ll try to read over some of the finanials and report back soon - BusinessJet is keeping me busy!
I read the SEC filing concerning the $9.99 million cash paid for fund.com and the reverse merger was a means of getting the company public. Reverse mergers are messy! $30 million was raised in 2 tranches of which $10 million paid for the domain name and the $20 million was invested in a CD linked to a performance index suppossedly designed by Fund.com - The bank that took the CD is also controlled by the investor who holds preferred stock in fund.com and thus is the control person. Either way the sale was capitalized on its balance sheet at slightly under $10 million.
Loans4Less.com, Inc. (LFLS) recently went public direct via a Reg A offering. LFLS controls its domain name and other intangible assets and is going to launch an exciting new all-purpose consumer loan site. LFLS is not going to execute as lenders. LFLS market cap is $20 million versus Fund.com $130 million.