Warren Buffett's Berskhire will sell a one-third stake in VeriSign. Its shares fell

Warren Buffett's investment conglomerate Berkshire Hathaway will sell one-third of its stake in VeriSign, an Internet services and domain registration company. The deal will total $1.2 billion and is atypical for Berkshire, as it will be an underwritten offering rather than an open market sale. Verisign's stock has been steadily rising over the past year, and its value has increased almost 1.5 times since the beginning of 2025. After the announcement of Buffett's decision, quotes fell by almost 7%.

Investment firm Berkshire Hathaway will sell 4.3 million shares to VeriSign, said in its press release. This is an underwritten offering, to be arranged by JPMorgan, according to VeriSign. The price will be $285 per share, and the deal is expected to raise $1.2 billion for Berkshire.

According to the prospectus issue, as a result, the share of Buffett's investment company will be reduced from 14.2% to 9.6%. Prior to the deal, Berkshire owned almost 13.3 million VeriSign shares, and now they will be left with about 9 million shares worth about $2.6 billion, which, according to the terms of the agreement, cannot be sold within a year.

Verisign's stock declined 6.8% on the premarket on July 29. The company's value is up nearly 48% this year.

Berkshire shares were up 0.3% in morning trading, up 6.3% since January.

VeriSign is a monopoly in registering websites with ".com" and ".net" top-level domains with fixed-price terms. Berkshire has been its shareholder since 2012, the company recalled in a press release, and in late 2024 and early 2025 Buffett actively increased his stake when the stock was worth about $200, reflects Barron's. VeriSign securities closed the last session on July 28, nearly hitting the $306. 

The stake increase by Buffett, who focuses on undervalued companies, GuruFocus called December 2024 a strategic deal, noting that it underscores confidence in VeriSign's business model and growth potential. Now, however, as suggests Barron's, the legendary investor wants to capitalize on the company's strong position. In addition, Buffett prefers to keep Berkshire's equity stakes in companies below 10% to avoid having to promptly disclose buy or sell transactions that could affect the market.

Wall Street's attitude toward VeriSign's stock remains subdued, with a consensus rating of Hold, according to data from MarketWatch. That said, there has been one less tip to sell the company's securities over the past three months - it now has two instead of three Underweight ratings. Last week, Baird raised its target price on VeriSign shares from $305 to $340, while Citigroup revised the target from $330 to $337. Both investment banks reiterated buy recommendations. 

Reducing part of a stake through an organized offering is an unusual practice for Berkshire, Barron's notes. When the company reduced its stake in Bank of America from more than 12% to less than 10% in the summer and fall of 2024, it was an open market sale. That said, Verisign's stock is less liquid than Bank of America's, and that may have influenced Berkshire's decision, the publication points out. 

This article was AI-translated and verified by a human editor