Fusu Introduces Domain Stock Exchange In Private Beta

[companyone]

Fusu introduces Domain Stock Exchange in private beta

by Frank Michlick

Domain Name News

Fusu Screenshot

Some friends of mine have been quietly working away for the last months and are now ready to introduce a new product in a invitation-only beta release. This preview is a Domain Name News exclusive: Fusu - The Domain Stock Exchange. The world’s first Domain Stock Exchange provides a secondary market trading platform for domain names.

Many times the concept of owning shares of of a premium domain name has been discussed, but now someone has stepped up to the plate and developed a service that allows domain owners to sell ownership of part of their domains. This allows them to gain immediate liquidity, without loosing control of their names. Investors can participate in the growth of domain values buy acquiring shares of domains.

So if you are looking to create some liquidity without selling one of your domains, you can list up to 45% of a domain on the public market and get immediate liquidity as investors buy in. Investors can buy percentage ownership in domains and trade their shares, thus benefiting from the increase in domain values. Fusu is the clearing house - like a traditional stock exchange, it provides the platform for owners, shareholders and investors. For each transaction, the company charges a small fee.

“Going public” happens when the domain owner sells shares of its domain to the public for the first time. This is called an Initial Domain Offering, or IDO.

Prior to going public, a domain owner contacts Fusu to advise them about how many shares to offer and the price of the shares. Approval is based on verification of the domain owner, fitness of the domain, and realistic market value. Once approved, investors can buy shares and sell them on the Fusu exchange.

While Fusu is a young startup, I do know the founders personally and I will be participating in the beta myself. The beta with virtual money will last until November 1st, and then they will launch the Domain Stock Exchange with real money.

In order to secure the shareholder’s investments, the makers of Fusu have come up with a solution for the security of the exchange, which they will announce at the launch. Maybe the future will also allow domain owners to pay dividends to their investors.

The team at Fusu would love to hear your feedback and would like to hear what you have to say… Please comment here, or contact them directly at:team @ fusu.com . Please also comment or email if you would like to be considered to participate in private beta.

[Update]: And for those of you who asked “Why Fusu?” - I am not sure what that stands for, but I do happen to know that one of the founders likes 4 letter domains. They do also own DomainStockExchange.com. DNN

 

[Zona]

Sounds like a very unique and interesting idea.

Have the owners gone through all of the proper legal channels with the SEC, etc. prior to launching this site/business?

I am not sure how the SEC would view a site like this which calls itself a "Stock Exchange" and is actually accepting money from investors and offering that it might pay dividends in the future.

Again, I think the idea very interesting, I am just curious about some of the legal aspects to this.

 

[companyone]

Hi Zona,

I was wondering this myself. You can get into all kinds of trouble if the SEC thinks your selling 'unregistered securities'.

Besides buying selling parts of domain names is more of a 'commodity' or virtual real estate asset...which would fall in the jurisdictions of the SEC's commodity' laws or in the case of classifying domains as cyber or virtual real estate...it would fall under jurisdiction of that governing body for real estate...I guess in the state the owner of the domain(s) resides.

I do not know...but it seems there might be a bit to much regulatory crap to plow through.

I do wish them luck with it...it is a very interesting idea.

Peace!
Dan

 

[patroiz]

But if you bought like 10% in a specific domain, would you get 10% of the revenue from the domain? Or could you just sell 40% of the ownership and collect the PPC for yourself?

 

[jr360]

How would FUSU regulate the domain? by law...
How do we know what the income off a domain actually is?
Sould domain providers to the exchange be an incorporation, or LLC, so investors are previed to records?

just thoughts...

 

[financialtraffic]

It's a great and innovative concept.

One issue I see is that if shares are sold based mostly on the current revenue that the domain produces, valuation may be skewed greatly. Some domains have limited revenue but a huge upside value potential in the hands of the right buyer/enduser. In other words, it's very possible that you could sell shares of a domain for peanuts because it's been labeled as low value, only to find out a few months later that someone is willing to lay down a large amount for your domain because it fits their business plan.

So, I see the owners absorbing a large part of the risk (reduced profit) if the name ends up doing well in the future.

Another issue I see is the actual control of ownership. And I admit I haven't looked into how this will be handled yet so forgive me if I'm missing something here....The only way I see it working is if FUSU actually takes control of the domain and the owner retains the master contract. Then, when shares are sold the revenue is sure to be distributed accurately. Also, if the name is sold the investors are in a better position to get their payout as well.

The last thing I want to do is buy shares and then deal with someone who decides they want to keep the money and not honor my stake/ownership.

I also don't know the legalities of what is being done here. I would imagine that was all researched prior?

I see a lot of promise, but if it's not done right it's going to be a myriad of legal problems.

 

[denny007]

I am not sure how the SEC would view a site like this which calls itself a "Stock Exchange" and is actually accepting money from investors and offering that it might pay dividends in the future.

SEC is some local (USA) authority, why do you think non-US companies should give a fok about some US local authorities ? Especially at times when USA is losing influence everywhere and US$ is becomming more a funny paper than a currency...

 

[financialtraffic]

It's true Denny - That's why I only eat out at Denny's now here in the U.S. It's the only place my weak dollars can get me some tasty, greasy reprieve.

But if not the SEC, who is going to regulate? If you have that much trust in strangers then you are truly a special individual.

 

[denny007]

But if not the SEC, who is going to regulate?

Why someone should regulate everything ?

If you have that much trust in strangers then you are truly a special individual.

I do not, idea maybe interesting but doable only if someone trustable is behind it.

 

[Steen]

But if not the SEC, who is going to regulate? If you have that much trust in strangers then you are truly a special individual.

Slovak authorities I suppose?

The more realistic answer in this case though: the market.

 

[denny007]

Slovak authorities I suppose?

Nobody would trust those either...

The more realistic answer in this case though: the market.

Yup exactly.

I just read Eurodns is their partner so its becomming more trustable now.

 

[Mahouni]

Mmm.. Denny's mini burgers :approve:

 

[draggar]

This still doesn't do anything for me emotionally. So I sell off 40% of my domain (say it's a $10 domain, I get $4 for it, but who regulates the "value" of the domain?) and other people get 40% of the revenue / sale price of the domain. Who's going to regulate me being honest on how much it is worth and how much I sell it for, unless it has to go though the exchange 100% (I don't like that idea).

Say I hire a programmer to build the site, do the stock holders also put in money for it or do they just reap the benefits with little risk while I'm the one taking all of the risk but only getting 60% of the rewards?

Sorry, not for me. Innovative concept - definitely, but too much of a risk for the domain owner (me) to really want to get involved with it.

 

[denny007]

So I sell off 40% of my domain (say it's a $10 domain, I get $4 for it

Its definitely NOT meant for $10 domains, more like 6-7 digit doamins, imho

who regulates the "value" of the domain?

Market is the best "regulator".

 

[ca11]

Honestly this is scary. Please visit the site. The owners decide which domain goes on the exchange, THAT IS REGULATION. More so, they openly admit that they are currently only accepting their FRIENDS domains, and they ask you nicely not to be offended if they reject yours. Is that not code for let's reap profits off all IPOs (IDOs in their words)??? Most importantly, this whole concept is rigged with insider trading loopholes. Whoever said that the market is the best regulator is either blind, marketing for or involved in that stock exchange. Ask them why is parking profit not equally divided and given to stakeholders??? Who gives a damn if EUROdns vouches for them? Everyone wants money. so if some manager is in on the deal, we're supposed to feel better??? Give me a break. Give me money and I will show you how many people I can corrupt. Seriously, they justify this whole stock market on the premise that the domain industry NEEDS a secondary market, since auctions and sale outlets are there; it is logical that a STOCK market emerges, like any industry. I'm sorry, but I have never seen a stock market for diamonds, though I have seen auctions and shops selling them. What about baseball cards? We need a stock market for those??? I'll give you one scenario and let you decide: I own eel.com , I sell 40% , the premium investors (one's who the owners have decided to make them auction off the domains and buy the initial offering to sell it back to the public at 10% profit), where is the transparency and what do we know about these middle men??? Isn't it logical to say that the owners have some sort of relationship with them?? There isn't ANY rule that says those owners (insiders) cannot deal or bid on the initial offering. That is scary and outright corrupt. Now eel.com is worth 200,000 (they priced it as such in reality). I received 80,000 and 88,000 (10% middlemen profit) shares are placed on market at $1. Let's say insiders bought 44,000 at avg 1.5 and then follow poor Joe, Jack, Sam, and others at avg $3. Isn't it obvious that all insiders will just gladly sell at $3 to all new comers? Or even, what stops ME, the original owner of eel.com to buy back first round and profit from all who follow?? Nothing. SEC is there for a reason. To stop those who love to prey on innocent people who dream of riches. Give me a break. This whole thing is rigged. My advice? Go start a stock market in Nigeria instead of Slovakia, maybe then we will rest assured that there is no scam! And you might as well start one for onions. Just sell words, to hell with valuables! These days, we all trust scripts in regulating prices don't we? Wake up people!