Pretty amazing news out of Wilmington, DE that Toys.com sold yesterday for $5.1MM to Toys R Us. At the initial auction on February 4, the bidding ended at $1.25MM and I was blown away at the poor execution by the attorney for TRU. He could have locked up the entire portfolio of domains (including Birthdays.com, eParties, Hobbies.com, Pinata.com, and numerous others), plus the eToys and Baby Universe businesses for millions less and not let a bidding war like this ever happen.
The format of the auction broke various assets into about a dozen “lots”. There was preliminary bidding on a lot-by-lot basis (I was bidding against TRU for eToys, with my own price reaching $750k), and later in the evening, there was a “multi-lot” auction when anyone could go back and bundle specific lots together and raise the price. It’s here where the TRU attorney missed the boat. He should have bundled everything except the “PoshTots” and “MyTwinn” assets, plus the lot that included all the unsold inventory, and put a price in the $3.75-$4MM range, and he’d have won. Instead they paid $7.25MM — $5.1MM for Toys.com + $2.15 for eToys, Baby Universe and ePregnancy.
This isn’t a “hindsight is 20/20″ kind of thing….At 2am, live from the attorney’s office, I voiced my disbelief at the strategy they were taking. I ultimately fault the Toys R Us management for sending an attorney to the auction alone instead of a business development person or other business-minded executive. Maybe $3MM is chump change to TRU and their private equity backers (KKR Group, Bain Capital and Vornado Realty Trust), but for an entrepreneur like me, it’s a glaring example of why the country’s in the state it’s in — bad management seems to be the rule, rather than the exception!
Posted 1 year ago at 9:42 am. Add a comment
Just got back from spending several days in Wilmington, DE attending the bankruptcy auction for “The Parent Company”, which included the businesses of eToys, Baby Universe, and several other business units, along with a valuable domain portfolio. I was taking a stab at acquiring eToys and/or Toys.com, but some big guns were there and prices were higher than I was prepared to pay for the biggest assets.
It was an absolutely CRAZY day of ups and downs. I arrived @ 10am Wednesday and didn’t leave until nearly 2:30am — and the action involving eToys & Toys.com was *still* going on! The high bidder for eToys + Baby Universe assets — an LLC we believe to be an acquisition vehicle of Toys R Us — paid $2,150,000, and a group backed by some big domain industry guys paid $1,250,000 for the Toys.com site. I’m the “back-up” bid for eToys.com @ $750,000, but it’s highly doubtful that the other deal falls apart.
I didn’t leave empty-handed. On behalf of a friend, we acquired the following names:
- Birthdays.com, .net & .org
- Birthday.net
- Ebirthdays.com
- E-birthdays.com & .net
- Happybirthdays.com
- eParties.com
- Pinata.com
Fun to be mentioned in TechCrunch. Also see Ron Jackson’s coverage on the event in DN Journal.
Posted 1 year, 1 month ago at 10:45 am. Add a comment
Spending a couple of days at the DOMAINfest conference in Hollywood this week. Interesting to meet folks who own just a handful of domains as well as individuals and companies with hundreds of thousands of names. Just like in the stock market and real estate market, there seems to be a lot of negative sentiment regarding the state of the domaining industry. If that’s the case, in the spirit of Warren Buffet’s “Be fearful when people are greedy and greedy when people are fearful”, my sense is the downturn is a BUYING opportunity for someone like me with a long-term approach.
Posted 1 year, 1 month ago at 1:42 am. Add a comment