When registrations are your primary business -- as well as your generic domain name and corporate moniker -- failing to file your financials on time is not a good thing. Register.com
Here's why: Register's bean counters have their hands full. They're are in the process of restating financials dating back six years as the company tweaks its revenue recognition methodology.
I should admit that the company is a bit of a guilty pleasure of mine, even though I haven't owned it in ages. It's that one moribund stock that I can't seem to kick out of my watch list. No, it's not that I think the company is a top performer. It sells overpriced domain-name registrations, and the smart customers are defecting. That's making it harder for Register to offer its remaining customers attractive value-added services. It also lost its CEO back in February.
With 82% of its business coming strictly from domain-name registrations, the lack of renewals hurt in many ways. Lower prices would help keep churn in check and move its clients toward its array of other surfaces. But that would come at the expense of profit margins in its core business.
The proliferation of bargain domain-registration sites has drummed down the niche. Whereas VeriSign
So, yes, Register is in a bad spot above and beyond the restatements and filing delays. So why haven't I kicked the stock out of my watch list? Quite simply, it's what some members of our Fool Community would consider a Green Gene stock. Register is cash-rich, with more than $4 a share in greenery. With the stock at $5.87, the company isn't trading for much more than its liquidity.
The days are gone when domain-name speculators ruled eBay
Some other recent stories worth registering away:
- I figured the company was one of four worthy stocking stuffers over the holidays.
- Yes, even Google may be getting in on the domain game.
- Discuss other stocks trading near their "net net working capital" in our Green Gene discussion board.
Longtime Fool contributor Rick Munarriz still can't believe that folks are paying $30 or $35 for domain name registrations through the full-priced sites. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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