What Happened?

Shares of internet infrastructure company VeriSign (NASDAQ: VRSN) fell 2.5% in the afternoon session after the company's third-quarter earnings beat was overshadowed by an underwhelming growth outlook and declining profitability. VeriSign reported revenue of $419.1 million, up 7.3% year-over-year, and earnings per share of $2.27, both narrowly topping analyst expectations. Despite these beats, the market reacted negatively to underlying trends. The company’s operating margin contracted to 67.8% from 68.9% a year earlier, suggesting increased costs are weighing on profits. Additionally, analysts' forecast for future revenue growth of just 4.1% over the next twelve months signaled a continued period of slow expansion, likely disappointing investors who were looking for a stronger performance.

After the initial drop the shares shed some of the losses and close the day $247.24, down 1.3% from previous close.

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What Is The Market Telling Us

VeriSign’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 8.5% on the news that news that major shareholder Berkshire Hathaway sold a significant portion of its stake in the company at a discount. Warren Buffett's Berkshire Hathaway announced it sold 4.3 million shares of the company in a secondary offering. The shares were priced at $285 each, representing a discount of nearly 7% to VeriSign's previous closing price. The sale, which raised approximately $1.23 billion for Berkshire, reduced its ownership stake in VeriSign from 14.2% to 9.6%. The move was primarily motivated by regulatory reasons, as dropping below the 10% ownership threshold allows Berkshire to avoid stricter reporting requirements from the Securities and Exchange Commission. VeriSign itself did not sell any shares in the offering and received no proceeds from the transaction.

VeriSign is up 20.5% since the beginning of the year, but at $247.08 per share, it is still trading 19.2% below its 52-week high of $305.98 from July 2025. Investors who bought $1,000 worth of VeriSign’s shares 5 years ago would now be looking at an investment worth $1,244.

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