Did Thought Convergence fall for a classic sales line?
May 13th, 2009Ive been reading over Andrew Allemann’s postings (DomainNameWire.com) about the Thought Convergence lawsuit against Jay Westerdal. Frankly it amuses me to see some of the claims that Thought Convergence makes. Below are two I want to focus on very briefly.
- “TCI says that Westerdal told it he had a $60M cash offer on the table”
- “Westerdal said the second and third installment of the purchase price for NI would “easily paid by the net profits””
The first claims that Thought Convergence was told an offer of 60 million was on the table, but apparently Jay was willing to sell it to them for 16 million? I cant help but laugh at this. What owner of a domain name hasnt said they’ve recieved higher offers in the past (even if that wasnt the case). How can you really believe that at his word to begin with? If your going to spend 16 million, I would hope you would use due dilligence to actually research the company your buying.
The second states that Jay told them that they would be able to pay the final installments off with the net profit that the acquired company would generate. Lets be honest, if you bought this one you didnt even look at the books, did you? What kind of person would sell a business that generates that kind of profit at the price you were getting it for?
Frankly, it sounds like Thought Convergence didnt bother looking at the company before they bought and got sold on it by a clever Salesman. Thats why when you go to a Used Car lot you always kick the tires before you commit to buying.
Justin
Great post Justin and nice detective work you did there
I guess all we can do is wait until the whole story comes out.
Comment by Reece Berg — May 14, 2009 @ 12:44 am
Man….that’s the exact same thought I had.
I read that suit thinking Thought Convergence bought this company in a “gentleman’s agreement” or a hand shake b/c of the way they were talking.
Crazy.
Comment by Johnny — May 14, 2009 @ 1:33 am
I just finished reading the whole lawsuit, and I agree, those 2 items seem silly, although when filing a lawsuit it is good to include any possible violation just in case the court will allow it, plus it helps make the defendant look bad.
Although “lies” like competing offers and future profit prediction are very common, those are just two of many many contract violations listed in the lawsuit, so overall it looks like Thought Convergence has a strong case. Even if Jay Westerdal did not intentionally do anything wrong, it appears that he violated the contract in several ways, so he may owe damages to Thought Convergence. Yes, Thought Convergence did not seem to do their homework very well but that does not mean they won’t win the case.
At this point we have not seen the Jay Westerdal’s defense yet, so all of this is just preliminary speculation. I amk sure he haqs his own explaination for all of these events.
Comment by Eric Borgos — May 14, 2009 @ 7:14 am
Jay Westerdal has a golden parachute here - the economy. TC bought Domain Tools in May 2008 - right before the economy went into the toilet in the second half of 2008. Jay’s lawyers will 100% use this in their defense to justify Domain Tools’ lack of performance and they will prevail. I totally agree with your opinion on this blog. Jay really danced a great version of “rope a dope” with TC and they bought it hook, line and sinker. Was TC stupid? Yes. I also think they were blinded by their desire to have the world’s greatest Domain Ecosystem (whatever that means).
Comment by Ronson — May 14, 2009 @ 9:34 am