Stock up 18% after U.S. government grants pricing windfall.
Shares in Verisign (NASDAQ: VRSN) are trading sharply higher today after the company signed a new agreement with the U.S. Government for .Com.
That Verisign would continue to run .com was never in doubt, but the Department of Commerce also agreed to let Verisign increase the price of .com domain names substantially.
Verisign shares are up about $25 to $166, up 18%. Shares topped $175 earlier in the day.
.Com price hikes are not guaranteed, as Verisign still needs to negotiate them with ICANN, the group that oversees the internet’s naming system. However, ICANN is likely to grant price hikes in return for larger fees paid from Verisign to ICANN.
They are certainly toasting in Reston, Virginia this morning.
Curious if anyone spots a problem here:
Cost to operate VeriSign:
* $455.9 million in 2009
* $448.3 million in 2010
* $442.6 million in 2011
* $416.3 million in 2012
* $436.9 million in 2013
* $445.7 million in 2014
* $453.4 million in 2015
* $455.6 million in 2016
* $457.3 million in 2017
* $463.1 million projected in 2018
Verisign’s Revenues:
* $615.9 million in 2009
* $680.6 million in 2010
* $771.9 million in 2011
* $873.6 million in 2012
* $965.1 million in 2013
* $1,010.1 million in 2014
* $1,059.4 million in 2015
* $1,142.2 million in 2016
* $1,165.1 million in 2017
* $1,210.4 million projected in 2018
The cost have remained exactly flat since 2009. It cost $455 million to operate VeriSign in 2009 and it cost $457 million to operate VeriSign in 2017.
Because of a growing base and economies of sale, VeriSign will generate $750 million in free cash flow in 2018.
Did David Redl did at these numbers?? What person in the right of mind would allow VeriSign to increase prices given these financials – on a no-bid contract?
Why did David Redl just enable this monopoly even further?
I use to have a lot of Verizon stock. I sold like 90% of it. I suck at stocks.
Sell the other 10% too. Verizon(VZ) has nothing to do with this. It is Verisign(vrsn).