Warren Buffett’s Berkshire Hathaway Inc. is strengthening its position as the largest shareholder of VeriSign Inc., a leading internet domain registry company, through a series of stock purchases. According to a Form 4 filing with the Securities and Exchange Commission (SEC) made late Thursday, Berkshire Hathaway has invested $28.55 million to acquire 143,424 additional shares of VeriSign over the past three trading sessions, ending December 24.
This move follows a broader buying spree, during which Berkshire Hathaway accumulated a total of 377,736 shares of VeriSign for $73.95 million over the past six sessions. The purchases, made at an average price of $195.78 per share, have increased Berkshire’s stake in the company to 13.7% of VeriSign’s outstanding shares, valued at approximately $2.67 billion at current market prices.
Berkshire Hathaway’s involvement with VeriSign dates back to the first quarter of 2024, when it began acquiring shares. As of March 31, 2024, the company held 12.8 million shares, a figure that remained steady until this recent purchasing activity.
The continued interest in VeriSign is likely tied to its impressive financial metrics, particularly its high margins. An analysis by MarketWatch revealed that VeriSign ranks among the top S&P 500 companies in terms of gross, operating, and net income margins. For the third quarter of 2024, VeriSign posted a gross margin of 88.02%, ranking 11th in the S&P 500, an operating margin of 71.25% (6th place), and a net income margin of 51.54% (7th place). These figures represent significant year-over-year improvements, underscoring the company’s strong profitability and pricing power.
VeriSign, which became a household name during the internet boom of the late 1990s, is known for its domain registration services, particularly for the popular .com, .net, and .cc top-level domains. The company went public in 1998 and has seen its stock grow significantly over the years, with notable surges during the dot-com bubble and more recently, surpassing its 2000 pre-bubble peak in 2021.
Despite a recent 1.7% drop in the stock price in 2024, VeriSign’s shares remain 20.9% below their all-time high of $255.93 in late 2021. Market analysts are generally optimistic about the company’s future prospects, with half of the six analysts covering the stock expressing bullish sentiments. The average target price for VeriSign’s shares is $230, suggesting a potential upside of 13.6% from current levels. Earnings for 2024 are expected to grow slightly to $7.99 per share, with further growth projected for 2025.
Buffett’s ongoing investment in VeriSign highlights his continued confidence in the company’s robust financials and dominant position in the internet domain registration industry.
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