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Are Big Tech CFOs (Inadvertently) Stealing From Shareholders?

When valuing a stock, analysts and shareholders evaluate always revenue and profit. Big tech COFs are sitting on assets worth tens of millions of dollars of annual profit (not just revenue, but true profit) in the form of unallocated IPv4 addresses. By not selling or leasing these out, they are incurring expenses to hold them and missing out on tremendous profits. At a 20X multiple (for context, Cisco is trading at nearly 18X earnings, Google at just over 33X earnings, Shopify at well over 700X earnings), big tech CFOs are actively preventing over $250 billion in market capitalization for their shareholders.

While these CFOs sit on sleeping (unallocated) IPv4 inventory, there is tremendous demand for those address blocks. So much so, that the federal government may step in. In February 2011, the last legacy blocks of IPv4 addresses were split among and distributed by Regional Internet Registries (RIRs). Many addresses were still available after this date, this threshold simply meant that supply was "officially" limited. Over the past 12 months, each of the five international registries responsible for allocating IP addresses to businesses has reported their stock is almost entirely depleted.

RIPE NCC, the European RIR, used a court order to seize IPv4 addresses from a bankrupt enterprise a few months ago. The US Congress considered language to direct the Department of Defense to sell off its unallocated IPv4 blocks. Think of what this means: the US government is watching international precedent for using litigation, legislation, and regulation to take IPv4 addresses from businesses. Simultaneously, they are working to sell off their own. I don't have a crystal ball, but this certainly looks like we are moving toward forcible seizure of sleeping IPv4 inventory from big tech — who are already missing out on hundreds of billions of dollars in market capitalization for shareholders by sitting on these inventories.

So what can we do? "We" must demand that big tech CFOs realize the profit of their IPv4 assets by selling them or leasing them on a secure exchange. I fear that if they don't take this simple step, not only will stockholders miss out on years of profit and correlating earnings multiples, those enterprises will ultimately be forced to give up their IPv4 inventory at a loss in the next 3-5 years. This isn't theory: we're actively watching a perfect storm of a global IPv4 shortage, new precedent to forcibly reintroduce IPv4 blocks into the open market, and federal government awareness of the issue.

Are you a financial decision-maker at a big tech organization? Do the right thing for your shareholders and internet users. We are relying on you to reintroduce your IPv4 addresses into the marketplace to create more sustainability as the internet evolves. Plus, imagine how happy your shareholders will be when you help them realize your portion of the more than $250 billion available?

Need some direction? Websites like IPXO will help you lease your IPv4 addresses to realize recurring revenue. If you'd rather sell and realize profits once, services like ipv4.global, HILCO, Apnic, Prefixx, and others can help. It's not labor-intensive or time-consuming. You won't have to hire anyone or spend resources training staff. In fact, it's probably the easiest way your enterprise will make tens of millions of dollars this year. I don't know that it's ever been easier and more profitable to do the right thing!

By Vincentas Grinius, CEO and Co-Founder at IPXO – Grinius is a vision-driven, forward-thinking IT entrepreneur with deep technical understanding and commercial acumen. Grinius brings more than a decade of experience in founding, developing, funding, and leading successful IT businesses. Visit Page

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Co-designer of the TCP/IP Protocols & the Architecture of the Internet

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