0001058854-16-000056.txt : 20160301 0001058854-16-000056.hdr.sgml : 20160301 20160229174833 ACCESSION NUMBER: 0001058854-16-000056 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20160301 DATE AS OF CHANGE: 20160229 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RIGHTSIDE GROUP, LTD. CENTRAL INDEX KEY: 0001589094 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 320415537 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-88435 FILM NUMBER: 161470014 BUSINESS ADDRESS: STREET 1: 5808 LAKE WASHINGTON BLVD., NE, STE. 300 CITY: KIRKLAND STATE: WA ZIP: 98033 BUSINESS PHONE: 425-298-2500 MAIL ADDRESS: STREET 1: 5808 LAKE WASHINGTON BLVD., NE, STE. 300 CITY: KIRKLAND STATE: WA ZIP: 98033 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CANNELL CAPITAL LLC CENTRAL INDEX KEY: 0001058854 IRS NUMBER: 943366999 STATE OF INCORPORATION: WY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 150 EAST HANSEN AVENUE, P.O. BOX 3459 CITY: JACKSON STATE: WY ZIP: 83001 BUSINESS PHONE: 4158358300 MAIL ADDRESS: STREET 1: 150 EAST HANSEN AVENUE, P.O. BOX 3459 CITY: JACKSON STATE: WY ZIP: 83001 FORMER COMPANY: FORMER CONFORMED NAME: CANNELL J CARLO DBA CANNELL CAPITAL MGMT DATE OF NAME CHANGE: 19980330 SC 13D 1 ccllc_name-13d.htm SCHEDULE 13D

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. )

Rightside Group, Ltd.

(Name of Issuer)

Common Stock, par value $0.0001 per share

(Title of Class of Securities)

76658B100

(CUSIP Number)

J. Carlo Cannell

Cannell Capital LLC

245 Meriwether Circle

Alta, WY 83414

(307) 733-2284

(Name, Address and Telephone Number of Person

to Receive Notices and Communications)

February 19, 2016

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☑

Note.             Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

(Continued on following pages)

(Page 1 of 8 Pages)

______________________

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a current valid OMB control number.

 
CUSIP No. 76658B100 Page 2 of 8 Pages
1

NAMES OF REPORTING PERSONS

I.R.S. Identification Nos. of above persons (entities only)

J. Carlo Cannell
2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a)  ☐

(b)  ☐
3

SEC USE ONLY
4

SOURCE OF FUNDS

(see instructions)

WC/OO
5

CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d)  ☐ or 2(e)  ☐

6

CITIZENSHIP OR PLACE OF ORGANIZATION

USA

NUMBER OF SHARES

BENEFICIALLY OWNED BY

EACH REPORTING

PERSON WITH

 7

SOLE VOTING POWER*

1,389,953
8

SHARED VOTING POWER

0
9

SOLE DISPOSITIVE POWER*

1,389,953
10

SHARED DISPOSITIVE POWER

0
11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

1,389,953
12

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES ☐

(see instructions)
13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11

7.32%*
14

TYPE OF REPORTING PERSON

IN

* Based on information set forth on the Form 10-Q of Rightside Group, Ltd., (the “Company”) as filed with the Securities and Exchange Commission on November 10, 2015, there were 18,987,303 shares of Common Stock par value $0.0001 per share (the “Shares”), of the Company issued and outstanding as of November 4, 2015.

   As of February 23, 2016 (the “Reporting Date”), the Cuttyhunk Master Portfolio (“Cuttyhunk”), Tristan Partners, L.P. (“Tristan”), the Tristan Offshore Fund Ltd. (“Tristan Offshore”), Tonga Partners, L.P. (“Tonga”), and sundry separately managed accounts, over which J. Carlo Cannell has investment discretion (the “Cannell SMAs” and collectively with Cuttyhunk, Tonga, Tristan and Tristan Offshore, the “Investment Vehicles”), held in the aggregate 1,389,953 Shares.

 
CUSIP No. 76658B100 Page 3 of 8 Pages

   Cannell Capital LLC acts as the investment adviser to to Tonga, Tristan, Tristan Offshore, the Cannell SMAs, and the investor sub-advisor for Cuttyhunk. Mr. J. Carlo Cannell is the sole managing member of Cannell Capital LLC. The Reporting Person possesses the sole power to vote and to direct the disposition of the Shares held by the Investment Vehicles.

Item 1.   Security and Issuer
The title of the class of equity securities to which this Schedule 13D relates is the Common Stock par value $0.0001 per share of Rightside Group, Ltd., a Minnesota corporation.
The address of the principal executive offices of the Company is 5808 Lake Washington Blvd. NE, Suite 300, Kirkland, WA 98033
Item 2.   Identity and Background
a)

The name of the Reporting Person is J. Carlo Cannell (the “Reporting Person”).

The Reporting Person is the sole managing member of Cannell Capital LLC, an investment sub-advisor for the Cuttyhunk Master Portfolio and investment adviser to the Cannell SMAs and to the following entities:

Tonga Partners, L.P.

Tristan Partners, L.P.

Tristan Offshore Fund, Ltd.

Set forth in the attached Annex "A" and incorporated herein by reference is a listing of the directors, general partners, managing members and controlling persons of the Reporting Person and the Investment Vehicles (collectively, the “Covered Persons”), and sets forth the principal occupation, citizenship and principal place of business of each Covered Person.

b)

The principal business address of the Reporting Person is:

245 Meriwether Circle

Alta, WY 83414

c)

The principal business of the Reporting Person is the performance of investment management and advisory services. The principal business of the Investment Vehicles is investment in securities.

d)

Neither the Reporting Person, nor to the best of its knowledge, any of the Investment Vehicles, has, in the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

e)

Neither the Reporting Person, nor to the best of its knowledge, any of the Investment Vehicles, has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgement, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect to such laws.

f)

The place of organization of the Reporting Person is as follows:

The citizenship of each Covered Person is set forth on the attached Annex A and incorporated herein by reference.

Mr. J. Carlo Cannell is the Managing Member of Cannell Capital LLC, a Wyoming limited liability company.

Item 3.   Source and Amount of Funds or Other Consideration

The securities to which this statement relates were acquired by the Reporting Person using the working capital of each Investment Vehicle as follows:

The Cuttyhunk Master Portfolio: $1,682,941

Tonga Partners, L.P.: $3,802,337

Tristan Partners, L.P.: $3,361,014

Tristan Offshore Fund, Ltd.: $1,658,271

Cannell Separately Managed Accounts: $1,362,282

The Investment Vehicles have invested an aggregate amount of approximately $11,866,844 in the Shares.

 
CUSIP No. 76658B100 Page 4 of 8 Pages
Item 4.   Purpose of Transaction


Mr. Cannell, on behalf of the Investment Vehicles, identified the Company as an entity satisfying each Fund's investment criteria. The Funds acquired and continue to hold the Shares as a long-term investment.

On February 19, 2016, Cannell Capital LLC sent a letter to the Company’s chairman. A redacted version of this letter is attached as Exhibit 99.

Mr. Cannell reserves the right to discuss various views and opinions with respect to the Company and its business plans with the Company or the members of its senior management. The discussion of such views and opinions may extend from ordinary day-to-day business operations to matters such as nominees for representation on the Company’s board of directors, senior management decisions and extraordinary business transactions. Mr. Cannell reserves the right to take such action as he may deem necessary from time to time to seek to maximize the value of the Shares. Such actions may include, but may not necessarily be limited to, pursuit of strategic initiatives to enhance shareholder value.

Mr. Cannell may engage in any of the actions specified in Items 4(a) through 4(j) to the Schedule 13D general instructions.

Except as set forth above and laid out in the Exhibit, Mr. Cannell has no present plans or proposals that relate to or would result in any of the transactions described in Item 4 of Schedule 13D.

Item 5.   Interest in Securities of the Issuer

Based on information set forth in the Company's Form 10-Q as filed with the Securities and Exchange Commission on November 10, 2015, there were 18,987,303 Common Shares issued and outstanding as of November 4, 2015.

(a)  As of the Reporting Date, for the purposes of Reg. Section 240.13d-3, Cannell Capital LLC may be deemed to beneficially own 1,389,953 Shares, or approximately 7.32% of the Shares deemed issued and outstanding as of the Reporting Date.

(b)  Cannell Capital LLC possesses the sole power to vote and to direct the disposition of the Shares held by the Investment Vehicles.

(c)  The following table details the transactions during the sixty days on or prior to the Reporting Date in Shares, or securities convertible into, exercisable for or exchangeable for Shares, by Cannell Capital LLC or any other person or entity controlled by him or any person or entity for which he possesses voting or investment control over the securities thereof (each of which was effected in an ordinary brokerage transaction by Cannell Capital LLC on behalf of the Investment Vehicles).

Entity Date Quantity Price

Per Share

 Form Of

Transaction
 
Cannell SMAs12/30/201524,7718.1200Buy
Cuttyhunk12/30/201529,4408.1200Buy
Tonga12/30/201559,4728.1200Buy
Tristan12/30/2015277,9038.1200Buy
Tristan Offshore12/30/2015135,8838.1200Buy
Cannell SMAs01/21/20167658.0511Buy
Cuttyhunk01/21/20164338.0511Buy
Tonga01/21/20162,2108.0511Buy
Tristan01/21/20161,6408.0511Buy
Tristan Offshore01/21/20169058.0511Buy
Cannell SMAs01/22/20161,0638.3951Buy
Cuttyhunk01/22/20166028.3951Buy
Tonga01/22/20163,0678.3951Buy
Tristan01/22/20162,2768.3951Buy
Tristan Offshore01/22/20161,2568.3951Buy
 
CUSIP No. 76658B100 Page 5 of 8 Pages
Entity Date Quantity Price

Per Share

 Form Of

Transaction
 
Cannell SMAs01/29/2016908.6526Buy
Cuttyhunk01/29/2016518.6524Buy
Tonga01/29/20162618.6525Buy
Tristan01/29/20161928.6525Buy
Tristan Offshore01/29/20161068.6525Buy
Tonga02/03/201619,2758.5196Buy
Tristan02/03/201619,6318.5196Buy
Tristan Offshore02/03/201611,1898.5196Buy
 
Item 6.   Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
None
Item 7.   Material to Be Filed as Exhibits
Letter to Mr. David E. Panos, Chairman of the Board
February 19, 2016
 
CUSIP No. 76658B100 Page 6 of 8 Pages

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated:  February 24, 2016

Cannell Capital LLC

By:  /s/ J. Carlo Cannell                 

Name:  J. Carlo Cannell

Title:  Managing Member

 
CUSIP No. 76658B100 Page 7 of 8 Pages

Annex "A"

MANAGERS AND GENERAL PARTNERS OF THE REPORTING PERSON AND THE INVESTMENT VEHICLES

The following sets forth the name, principal occupation, citizenship or jurisdiction of organization and principal place of business of the directors, general partners, managing members or controlling persons of the Reporting Person and the Investment Vehicles (the “Covered Persons”) indicated below:

J. Carlo Cannell

Name:

Title or Relationship with Reporting Person:

Principal Occupation or Employment:

Citizenship or Jurisdiction of Organization:

Principal Place of Business:

J. Carlo Cannell

Managing Member

Investment Management

Wyoming, United States

(1)

Cannell Capital LLC

Name:

Title or Relationship with Reporting Person:

Principal Occupation or Employment:

Citizenship or Jurisdiction of Organization:

Principal Place of Business:

J. Carlo Cannell

Managing Member

Investment Management

Wyoming, United States

(1)

Tonga Partners, L.P.

Name:

Title or Relationship with Reporting Person:

Principal Occupation or Employment:

Citizenship or Jurisdiction of Organization:

Principal Place of Business:

Cannell Capital LLC

Investment Adviser and General Partner

Investment Management

Wyoming, United States

(1)

The Cuttyhunk Master Portfolio

Name:

Title or Relationship with Reporting Person:

Principal Occupation or Employment:

Citizenship or Jurisdiction of Organization:

Principal Place of Business:

Cannell Capital LLC

Investment Subadviser

Investment Management

Wyoming, United States

(1)

Tristan Partners, L.P.

Name:

Title or Relationship with Reporting Person:

Principal Occupation or Employment:

Citizenship or Jurisdiction of Organization:

Principal Place of Business:

Cannell Capital LLC

Investment Adviser and General Partner

Investment Management

Wyoming, United States

(1)

Tristan Offshore Fund, Ltd.

Name:

Title or Relationship with Reporting Person:

Principal Occupation or Employment:

Citizenship or Jurisdiction of Organization:

Principal Place of Business:

Cannell Capital LLC

Investment Adviser

Investment Management

Cayman Islands

(2)

 
CUSIP No. 76658B100 Page 8 of 8 Pages

Annex "B"

Agreement Regarding the Joint Filing of Schedule 13D

1) Each of them is individually eligible to use the Schedule 13D to which this Exhibit is attached, and such Schedule 13D is filed on behalf each of them;
2) Each of them is responsible for the timely filing of such Schedule 13D and any amendments thereto, and for the completeness and accuracy of the information concerning such person contained therein; but none of them is responsible for the completeness or accuracy of the information concerning the other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate.

Dated:  February 29, 2016

By:  /s/ J. Carlo Cannell                 

Name:  J. Carlo Cannell

Cannell Capital LLC

By:  /s/ J. Carlo Cannell                 

Name:  J. Carlo Cannell

Title:  Managing Member

EX-99 2 Exhibit_99.htm EXHIBIT 99

Cannell Capital LLC

245 Meriwether Circle

Alta, WY 83414

Tel (307) 733-2284 Fax (307) 264-0600

info@cannellcap.com

February 19, 2016

Mr. David E. Panos
Chairman of the Board
Rightside Group, Ltd.
5808 Lake Washington Boulevard NE
Suite 300
Kirkland, WA 98033

Dear Mr Panos

I am troubled by the pivot toward, and unrelenting propaganda about, new generic top-level domain names (“GTLDs”). Whilst I concede that new GTLDs are one of many opportunities in the emerging market for second generation domain names, Rightside Group, Ltd. (“Rightside”, “NAME”, or our “Company”) is the second-largest domain name registrar, a business that is here and now. I don’t hear Rightside speaking to this strength. Our Company glosses over this critical revenue component and plays up new GTLDs at the expense of the revenue contribution made by the traditional registrar business.

The user interfaces at eNom and Namejet look and feel clumsy and stale. Looking past the main page of NAME’s sites, the logged-in front-end infrastructure is untouched and acts like time capsule to what existed half a decade ago. Most of our growth in names under management is coming from a reseller channel that is out-executing your own in-house registrar eNom.

While I am a believer in new GTLDs, it is going to be many years before their revenue in any way materially approaches the revenue potential of our registrar operations. In my view, NAME’s registrar has become like a crazy aunt kept in the basement, one that you refuse to adequately clothe or feed, but who steadfastly spins straw into gold used to subsidize a stable of largely substandard new GTLDs such as .democrat, .dance, .army, .navy, and .airforce. Most of these new GTLDs are irrelevant and will never be sold in material volumes. NAME is holding back the growth potential of your registrar by pushing garbage extensions to a user base that quietly knows better.


Rightside is a gem in that it has many assets which are unique or difficult to duplicate. Cannell Capital LLC would not have acquired 1,389,953 shares otherwise. We have some good new domain-endings as well, with .news being one example, but this particular domain-ending and a clutch of others like it do not constitute enough of a “front” to gloss over the majority of your extensions which are low in value and should be spun-off. I believe that we should sell or even abandon some of our worst extensions. They should not consume all the resources of our Company at the expense of the assets that are currently profitable.

The current members of the Board of Directors and indeed many of your shareholders don’t seem to recognize this. I do. Today I stand up to be that paladin. To wit, I submit both a plan and a request: (i) Unify all Company products under the eNom.com brand; (ii) Terminate no less than 20% of your weaker staff; (iii) Move the Name.com entity to Seattle under the eNom.com brand and close expensive ancillary offices; (iv) Rebuild and relaunch the front-end infrastructure at eNom.com to bring it to the current standard expected by consumers; (v) Refinance all debt; and (vi) Add two new board members with a suggestion, but not a requirement that two incumbents resign.

I would prefer to avoid waging an expensive proxy battle to elect my own slate of directors. Such a fight would be costly to both myself and our Company. It is my sincere hope that substantive discussions between myself and the current Board of Directors could result in the infusion of fresh blood without such a fight.

Best Regards!

Sincerely,

/s/
J. Carlo Cannell