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Apparently Verisign is worth the same with or without price hikes

Company’s market cap is back up to October levels.

Just as I don’t understand why the DOW has been hitting all time records lately, I also don’t understand this: Verisign is apparently worth the same with or without seven-percent-a-year price hikes on .com.

When Verisign dropped the bomb on October 25 that the Department of Commerce was reviewing its ability to automatically increase prices, the company had a marketcap of about $7 billion.

Verisign signed a contract renewal without the hikes.

Now, six months later, Verisign’s market cap is back up to $7 billion.

Verisign is a stable, cash printing machine. Yet you’d think shaving off hundreds of millions of dollars a year in pure profit would result in a lower valuation.

Verisign stock

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  1. Chip says

    Other factors to consider:
    * More regs/renewals as a result of lower prices. (A 1% lift get 15% of that profit)
    * Lower legal fees as a result
    * A fresh contract provides the stock market with valuable stability.
    * The continued maturation of the new GTLD process firms up projected future revenue streams. Doesn’t make them real, just closer to real than before.

  2. Frantisek Mrazek says

    There are som very ot money on the market. Perhaps China is offloading some of their US bonds for whatever they can. Because they figured out thsoe bonds might be soone worthless, when USA defaults.

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