Verisign shares pressured by Berkshire Hathaway sale
Berkshire Hathaway cashed out a circa US$1.2bn stake in Verisign through an overnight stock sale Monday, in a strategic move to reduce its stake in the digital domain provider to below 10%.
JP Morgan, as sole bookrunner, priced that all-secondary sale of 4.3m shares at US$285.00, the bottom of the US$285.00-$290.00 marketing range and a 6.9% discount to the US$305.98 Monday closing share price. The bank conducted a targeted wall-cross before launching the deal publicly.
Early in Tuesday’s session, the internet domain provider’s shares were trading at US$284.87, or slightly below the offer price on the Berkshire selldown.
Berkshire reduced its Verisign stake to 9.6% from 14.2%, with a further reduction to 9% possible should JP Morgan exercise a greenshoe option to sell another 515,032 shares. That makes Berkshire Verisign’s second largest shareholder, behind only Vanguard (11.2%), according to LSEG data.
The company, which began accumulating the stake in 2012 through its Geico subsidiary, agreed to be locked up from selling again for one year.
The selldown to below 10% subjects Berkshire to less regulatory disclosure, though that burden has been in place for a long, long time. It also makes it easier to sell stock in the future.
Verisign last week reported moderately strong second-quarter results that saw it grow revenue by 5.9% to US$410m and prompted management to increase revenue guidance for the full year to US$1.65bn. The stock had run up nearly 7% on those results ahead of the Berkshire sale.