TORONTO - Bingo.com has announced that it has bought its own domain name for a total payment of $900,000 in shares. Confused about how a public company can operate without actually owning what appears to be its primary asset? Then join the party.
It turns out Bingo.com, which is listed on the Toronto Stock Exchange, has been operating for more than a decade without actually owning the domain it is named after. Instead Bingo.com has been listing the domain name from Bingo, Inc in return for a payment equal to 4 per cent of gross profits since January 18, 1999. Indeed, if they had not ended that arrangement then Bingo.com would have had to pay 4 per cent of gross profits to Bingo, Inc.
Bingo.com employed Evans & Evans Inc, a boutique Canadian investment bank, to value the domain and they came back with a price of between $1.4 and $1.6 million.The two parties have now agreed a sale price of $900,000 for the domain, to be paid in newly issued bingo.com stock.
Bingo.com chief executive Tarnie Williams said: “The successful acquisition of the remaining Domain Name payments owing to Bingo, Inc., at a substantial discount to the independent valuation, is another step in simplifying the operations of Bingo.com and a further strengthening our Balance Sheet.”
It certainly looks like Bingo.com has got a good valuation on the domain. One leading UK bingo player told Bingo News: “I'd have paid substantially more than that to buy bingo.com. It's the very best domain out there and with the US market possibly opening up I'd have killed for it. Slots.com went for $5.5 million less than three months ago so it's hard to see how Evans & Evans came up with their number.”
Bingo News predicted that the third party arrangement for the domain name would create problems for the company in May 2010 when Unibet bought a 25.9 per cent stake in Bingo.com for US$2.5 million. At the time Petter Nylander, chief executive of Unibet, said: “Investing in Bingo.com, one of the strongest bingo brand names in the industry, is exciting for us. We believe in the power of the Bingo.com URL”.
