Activist Investor To GoDaddy: Cut Costs and Improve Sales, or Sell 66
GoDaddy needs to cut more jobs, reduce the tech budget, and address why it is falling short of financial targets outlined at its shareholder day in 2022, or the board should consider exploring a sale of the business. From a report: This is the view from activist investor Starboard Blue LLP, GoDaddy's third largest shareholder and one which is agitating for change and a seat on the corporation's board, something it has so far failed to secure. An open letter [PDF] to GoDaddy's top brass starts off friendly enough, with Starboard Value managing member Peter Feld describing the business as a "one-stop shop for micro- and small-businesses looking to develop a web presence."
Feld says Starboard Value invested in the stock, a move it made public in early 2022, on the basis of opportunities for strong revenue growth, "meaningful margin expansion" and a "more appropriate capital allocation strategy." "Unfortunately, despite each of these opportunities remaining, over the last 18 months we have been disappointed by GoDaddy's operational, financial and stock price performance," the letter adds. At the investor day, GoDaddy projected compound annual growth in revenue of 10 percent between 2022 and 2024, as well as 15 percent EBITDA, 20 percent free cashflow per share and $3 billion in share buybacks. Further reading: Alphabet Selling Google Domains Assets To Squarespace.
Feld says Starboard Value invested in the stock, a move it made public in early 2022, on the basis of opportunities for strong revenue growth, "meaningful margin expansion" and a "more appropriate capital allocation strategy." "Unfortunately, despite each of these opportunities remaining, over the last 18 months we have been disappointed by GoDaddy's operational, financial and stock price performance," the letter adds. At the investor day, GoDaddy projected compound annual growth in revenue of 10 percent between 2022 and 2024, as well as 15 percent EBITDA, 20 percent free cashflow per share and $3 billion in share buybacks. Further reading: Alphabet Selling Google Domains Assets To Squarespace.
Cloudflare is going to eat their lunch (Score:5, Interesting)
I moved some domains to Cloudflare, which charges you much closer to their actual cost. It was basically half of what GoDaddy wanted.
Even before that, I started using other registars simply to avoid GoDaddy's constant pushing of extras.
Re:Cloudflare is going to eat their lunch (Score:4, Informative)
I moved some domains to Cloudflare, which charges you much closer to their actual cost. It was basically half of what GoDaddy wanted.
Even before that, I started using other registars simply to avoid GoDaddy's constant pushing of extras.
How ironic GoDaddy's inability to offer competitive rates is partly due to considerable marketing expenses...all while a CEO probably bitches about the amount of spam they receive...from their own company...
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Meanwhile their DNS and email setup is hardwired to not only make it impossible to trace the exact origin of SPAM coming from within their network it makes it impossible for legitimate email sent from their systems to not also appear as though its origin has been purposefully obscured, which causes widespread false-positives in SPAM detection, and somehow nobody at their company can figure out why nobody serious takes them seriously.
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Oh, thanks for confirming my unspoken assumption; that the Russians are behind GoDaddy's SPAM problem.
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As a card-carrying libtard, I'd have marked this as funny.
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Over 10 years ago I used GoDaddy for my web hosting. The amount of SPAM they sent you was absolutely ridiculous. Every single day there'd be some crap marketing emals clutering up my inbox. It got so bad that I had to create a rule to send all emails from them to Junk. About 5 years into things they arbitrarily decided to change my "unlimited" (sic) hosting so that email was no longer included. The first thing I knew about it was I hadn't received any email for a week.
So after getting really frustrated
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Same here. Their prices got stupid high over the years.
Re:I can fix it... (Score:4, Funny)
...when all you need to do is register a domain name and point it at some nameservers.
What you basically complained about above, likely represents the needs of less than 1% of their customer base.
The other 99% couldn't point to a DNS record with both mouse buttons and a fistful of host files. Hence the marketing 'help'.
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hilarious! (Score:3)
the pdf is like
1. improve revenue
2. ????
3. profit
Re:hilarious! (Score:4, Insightful)
That's the joke. The pdf makes it sound like improving revenue is the trivially easy part.
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So it's more like:
1. ????
2. Improve revenue
3. Profit!
Starboard to GoDaddy: Wah, Wah (Score:2, Insightful)
Notice how nothing in Starboard Blue LLP letters, explains how to GROW THE BUSINESS, or where Starboard sees growth opportunities. Their only suggestion is to cut costs. Brilliant.
Wah wah wah....
Re:Starboard to GoDaddy: Wah, Wah (Score:5, Insightful)
Activist investors don't actually care about profit. They go wherever they think they can drum up discontent, generally with an eye toward eventually getting chairs on the board. At that point they start looking for every opportunity to convince a majority that they'd be better off selling the company and taking the payday rather than actually running a company.
Borrow money, buy slightly-under-performing shares, agitate for a board position where you can then entertain offers to sell. A poor man's hostile takeover.
There are plenty of poorly-run businesses out there, but none of them were made stronger by parasites like this.
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Truth. "Activist Investors" don't care about the companies themselves. They make statements like this in order to stir discontent. They want the company to sell so they can dump their own shares for a profit.
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Now placing your shares into put contracts and spreads as you tear apart a company in stages publicly is profitable. Getting a company to break into 3 can be profitable. Getting the 1 part of the company that is doing a good amount of cashflow sold to your friends on the cheap, is profitable. Knowing the insider infomation as an activist investor is profitable,
"dump their own shares for a profit" could be some after taxes advantage pla
Re:Starboard to GoDaddy: Wah, Wah (Score:4, Insightful)
Because they're the INVESTOR, not the MANAGER.
It's the job of the CEO to grow the business and come up with ideas of how to do that. An investing firm's job is to find the capital and assign risk, however GoDaddy's CEO has consistently overpromised and underdelivered.
These kind of letters are often a pre-cursor to getting the CEO fired. It's basically a "performance improvement plan" from your employer. It's not going to tell you how to improve, it simply states metrics you should be reaching and are failing in, the how is the training you've claimed to have had to get the job in the first place.
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Vultures (Score:5, Insightful)
Godaddy turned a profit of $242M and $352M respectively in 2021 and 2022. That's profit so after all payroll and other operating expenses.
But that's just not enough to have a consistent, stable and profitable business anymore. There always has to be more. More growth, more margins, more markets, more risks, more profits. It's insidious and honestly to me is a contributing factor to a lot of instability, unhappiness and economics and cultural rot.
Combine that with people like Tim Guner "Saying the quiet part loud" and it's easy to see why the younger generations are despondent about capitalism in general. [theguardian.com]
“We need to remind people that they work for the employer, not the other way around. There’s been a systematic change where employees feel the employer is extremely lucky to have them as opposed to the other way around. It’s a dynamic that has to change.”
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Godaddy's earnings per share was around $0.5-0.6 in 2022-2023 on a (fairly stable) stock price of around $70. That's less than 1%. You can get no-risk interest at several percent, so unless something changes, shareholders would be better off selling and buying government bonds, or even just putting their money in a savings account.
GoDaddy isn't profitable corrected for inflation, and there's nothing new about investors wanting a return that's greater than a savings account.
Re:Vultures (Score:4, Insightful)
Stock prices are entirely made of investor expectations, so saying the earnings are not high enough relative to the stock price just means "I expected more so give me more". That's just greed.
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GoDaddy has been consistently promising investors growth of 10-20% per year for the last few years.
The investor is trying to hold the board to account for their own promises.
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Odd. When I buy a stock I have to give them actual money for it.
The stock price is how much capital you have to invest to buy a part of the business. The business returns what it returns. In the case of GoDaddy, that's not very much.
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Remember when it was a public discussion on how hard to scrape together a 3 million dollar OPX budget to keep and domain registrar online. Not
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There may be something to the suggestion that GoDaddy make their operation more efficient hey?
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Younger generations can't afford mortgages because their elders wasted so much land on boring, low density tract housing and seas of grey parking lots that look like some kind of post-apocalyptic wasteland [reddit.com], and zoned it all to stay that way forever, no redevelopment into land-efficient condos or townhouses allowed.
And then Boomers and now Gen-X'ers wonder why Millennials don't just stay put and become obedient little corporate minions like they were forced to do in order to pay the mortgage.
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You know, you could change or abolish zoning laws.
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Whats more hilarious is that GoDaddy does not provide any unique service.
It has never been (and never will be) a unique, irreplaceable company.
It provides a commodity service that could be started in someone's garage.. today.
If I was the CEO I would laugh at this letter, ignore them all the way to the bank, and hope for them to try to fire me, collect the bag and laugh some more.
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On a market cap of $11B, that's next to nothing. We've had 3 years of Bidenflation, that money is now worth 10-20% less than it was 3 years ago, so in order not to make a loss, they should've (like many other companies) gained at least a few percentage points in the market, they haven't for nearly a decade, so in the long term they are losing money (slowly but surely).
They've stagnated, they're dying, that's not good for investors.
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You undermine your competency by calling inflation in the USA bidenflation.
Stop being an example of Dunningâ"Kruger and go get vaccinated.
capitalism is a scam (Score:5, Insightful)
this kind of "investor" (nah, parasite) behavior is why we can't have nice things.
time to get rid of capitalism for good. it's not serving humanity.
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Same for communism, all those millions that died under Mao and Stalin clecarly show its a broken model.
that's because... (Score:4, Interesting)
every idiotic rant about capitalism seems to emit from the maw of a person who is in his late teens to early twenties and has lived his entire life at somebody else's expense but is now about to need to support himself and refuses to become an adult, or a college professor (who was one of those guys earlier, but then just figured he'd spend the rest of his life in an artificial scheme known as a college campus). These people never have any alternative to capitalism/free markets and they know full-well that Marxism is evil and fails, so they're unwilling to openly offer Marxism and then debate it on the merits. When you yell "capitalism sucks!" and then dive for cover, offering no alternative that is supposedly superior, the people who understand reality know what you're up to... you're pushing Marxism, without the guts to publicly admit it.
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There is no stark division between "capitalism" and "communism". Every real-world government that's ever existed has elements people ascribe to both of these nebulous, ill-defined terms. Anyone describing one or the other as "evil" has clearly bought into a politico's fantasy - to the occlusion of his own understanding.
Occlusion is the point of these terms in the first place. That's why politicians haven't shut up about them for a century. Practicality, subtlety, and nuance are not angles they want you to c
Re:capitalism is a scam (Score:5, Interesting)
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time to get rid of capitalism for good. it's not serving humanity.
well, it serves a fraction of humanity. doesn't that count?
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I am listening, so you are going to give up private ownership and operation of property, what are you suggesting instead?
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Capitalism is where workers wages or benefits are tied to profits.
Capitalism is where government controls the influence of business entities such as modern social-media platforms. Also, it limits the power of such entities through high-taxes and denying human rights (such as 'free' speech).
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The only scam worse than capitalism, is socialism.
Oh, and dictatorships are worse too. But then I repeat myself.
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Dictators tend to cloak themselves in the rhetoric of socialism. What else can they do? People intuitively understand fairness, so a dictator has to claim to provide that. At least to his loyal followers, if not to everyone.
If a dictator wants to cloak himself in the rhetoric of capitalism, he has to convince people that uninhibited wealth accumulation and the attendant unchecked power will guarantee a normal person some sort of freedom. It's a much harder sell, so they tend not to do that.
The only reason i
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Dictators tend to cloak themselves in the rhetoric of socialism. What else can they do?
Fascism.
Ha! And some moron maked this "insightful" (Score:2)
You offered no insight at all. Nothing. Simply a Wha!!!! Wha!!! capitalism sucks, Wha!!! without a single suggested alternative. Your post had all the intellectual heft of a statement by a modern college professor - the output of a pickled brain devoid of exposure to the real world. Abstract comparisons of something real and functional to some imagined state of perfection will ALWAYS make the real thing look flawed and tawdry, but the comparison is invalid because utopia does not in fact exist. The best th
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Suggested alternative: A mixed environment. How about democratic socialism, such as practised by the Dutch and Germans? How about a strong social safety net and labor/industry protections, in order to cut crime? The only flaw that I've found in modern "conservative" American thinking is that their idea has been tried, and failed, multiple times in the last couple hundred years. And it was not because they didn't try hard enough, or they weren't pure enough, or because of interference. It fails because "the
GoDaddy sucks (Score:2)
So I find the idea of a malicious investment group destroying them from the inside for a quick profit pleasant.
It is also another example of where capitalism encourages undesirable behaviour without addition controls, of course. It's just that in this specific case I like the inevitable outcome.
sad part is (Score:2)
They have some of the best customer service in the industry. I stay with them for that reason alone.
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I guess that is going to get axed in the coming days. Then there will be no reason for any one to stay with them.
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I worked for one of their competitors about a decade ago. "Better support" was the selling point there, as well, and they had it. Then the ownership changed, investor-types took over, and an IPO happened. The enshittification started immediately. Within a few years it reached the end-stages where they didn't even bother trying to keep up appearances anymore, and just shipped all the support overseas.
I'm not sure how they expect 10% annual revenue growth, other than inflating their prices by 10%. Their custo
Trash company (Score:2)
Sounds like GoDaddy needs to pimp some more big-titty models in its commercials.
Can we come up with a better name (Score:2)
Even better how about laws and regulations that stop rich people from killing companies and destroying jobs for a quick buck?
I suspect I don't want to know... (Score:2)
What ground my gears (Score:1)
Not gonna happen (Score:2)
The reason their sales are weak is that they've spent a very long time screwing over their own customers at every turn to try to increase profits, and they've finally reached the point where almost everyone knows they're jerks who are as likely to steal your domain as they are to help you keep it registered.