VeriSign Shares Plummet After Berkshire Hathaway Sells Stake Below 10% Threshold

Berkshire Hathaway, led by Warren Buffett, has sold 4.3 million VeriSign shares for $1.23 billion, reducing their stake from 14.2% to 9.6% and avoiding SEC reporting requirements. Since first investing in 2012, Berkshire's VeriSign position has grown from $4.07 billion to $4.13 billion, with shares rising 48% YTD. Berkshire's largest holdings include Apple, American Express, Coca-Cola, and Bank of America, with Occidental Petroleum constituting 5% of their portfolio.

Berkshire Hathaway, the investment conglomerate led by Warren Buffett, has sold 4.3 million shares of Verisign for $1.23 billion, reducing its stake in the company from 14.2% to 9.6%. The sale, which took place on Monday, was priced at $285 per share, a 6.9% discount from Verisign's closing price of $305.98 on Monday [1].

The sale is significant because it allows Berkshire to avoid additional regulatory obligations that come with holding more than 10% of a company's shares. Verisign, a Virginia-based company best known for operating registries for top-level domains like .com and .net, had seen its share price rise more than six-fold since Berkshire began investing in 2012 [2].

Since the initial investment, Berkshire's Verisign position has grown from $4.07 billion to $4.13 billion, with shares rising 48% year-to-date (YTD). This sale marks a strategic move for Berkshire, which is known for its long-term investment strategy and the ability to capitalize on opportunities when they arise [3].

Verisign shares fell sharply in overnight trading following the announcement, but have since rebounded, up nearly 50% YTD. The company's revenue in the second quarter increased by 5.9% to $410 million [1].

Berkshire Hathaway's largest holdings include Apple, American Express, Coca-Cola, and Bank of America, with Occidental Petroleum constituting 5% of their portfolio. The company's decision to sell a portion of its Verisign shares is part of a broader strategy to optimize its investment portfolio and focus on more liquid assets [3].

The proceeds from the sale will allow Berkshire to maintain its financial flexibility and explore new investment opportunities. The sale also underscores Warren Buffett's reputation as a savvy investor who is always looking for ways to maximize returns and minimize risks [3].

References:

[1] https://www.newsweek.com/warren-buffett-makes-major-sale-verisign-2105518
[2] https://finance.yahoo.com/news/verisign-falls-buffetts-berkshire-sells-143826518.html
[3] https://www.ainvest.com/news/berkshire-hathaway-sells-33-verisign-stake-6-9-discount-2507/