Verisign Plunges 9.5%, Buffett's Berkshire Sells $1.2B Stake—Can This Be a Buying Opportunity?

Summary
• Verisign (NASDAQ:VRSN) fell 9.5% intraday to $276.83, its lowest since April 2025.
• Berkshire Hathaway sold 4.3M shares at $285, triggering a 365-day lockup.
• Q2 earnings beat EPS but revenue missed, yet full-year guidance rose.

Verisign’s sharp selloff follows a blockbuster secondary offering by Berkshire Hathaway, which offloaded 4.3 million shares at a $285 discount to its previous close. While the stock remains above its 50-day moving average and holds a 52-week high of $310.60, the move has rattled investors. With a 52-week low at $172.49 and a current P/E of 31.8, the question looms: Is this a panic-driven dip or a strategic entry point?

Berkshire’s Strategic Exit Sparks Market Tremors
Verisign’s 9.5% decline stems from Berkshire Hathaway’s $1.23 billion secondary offering, reducing its stake from 14.2% to 9.6%. The move, framed as a regulatory compliance measure, triggered immediate selling pressure as institutional investors interpreted the discount as a bearish signal. While Verisign’s Q2 earnings ($2.21/share) exceeded expectations and revenue growth forecasts improved, the market prioritized the perceived liquidity risk over fundamentals. The lockup period until July 30 adds near-term volatility, as remaining Berkshire shares could face future selling pressure.

Internet Sector Awaits Stability as Godaddy Stumbles
The broader Internet & Direct Marketing Retail sector remains mixed, with sector leader GoDaddy (GDDY) down 0.77% as of 19:19 ET. While Verisign’s decline is driven by idiosyncratic shareholder action, the sector’s underperformance reflects macroeconomic caution. Investors are closely watching whether the $280 support level holds, as a break below could trigger a broader selloff in tech infrastructure plays.

Strategic Bets: ETFs and Options for Navigating the Volatility
• 200D MA: $235.05 (well above current price)
• RSI: 69.64 (neutral zone, no overbought/sold signal)
• MACD: 4.11 (bullish histogram)
• Bollinger Bands: $273.59 (lower band) vs $276.83 (current price)

Verisign’s technicals suggest a rebound from the lower Bollinger band is likely, with the 30D MA at $285.89 acting as near-term resistance. The RSI’s neutrality and MACD’s positive divergence hint at a potential short-term reversal. For leveraged exposure, consider the Global X Cybersecurity ETF (BUG), though its correlation to VRSN remains weak.

Top Options Picks:
• VRSN20250815C290:
- Type: Call
- Strike: $290
- Expiry: 2025-08-15
- IV: 26.69% (moderate)
- Leverage Ratio: 111.22% (high)
- Delta: 0.258984 (moderate)
- Theta: -0.308722 (significant time decay)
- Gamma: 0.019645 (sensitive to price moves)
- Turnover: 239,321 (liquid)
- Why: High leverage and gamma make this ideal for a rebound above $290, with theta decay manageable over a 15-day horizon.
• VRSN20250919C290:
- Type: Call
- Strike: $290
- Expiry: 2025-09-19
- IV: 22.71% (reasonable)
- Leverage Ratio: 50.55% (moderate)
- Delta: 0.354249 (moderate)
- Theta: -0.157275 (lower decay)
- Gamma: 0.015459 (balanced)
- Turnover: 119,589 (liquid)
- Why: Offers a safer, longer-term play with lower theta decay, suitable for a gradual breakout.

Payoff Projections (5% downside to $263.0):
- VRSN20250815C290: max(0, $263 - $290) = $0 (no intrinsic value)
- VRSN20250919C290: max(0, $263 - $290) = $0 (no intrinsic value)
Aggressive bulls may consider VRSN20250815C290 into a bounce above $290, while risk-averse investors should wait for a confirmed breakout above the 30D MA at $285.89.

Backtest Verisign Stock Performance
VRSN has historically shown positive short-to-medium-term performance following a -10% intraday plunge. The 3-Day win rate is 52.36%, the 10-Day win rate is 56.52%, and the 30-Day win rate is 59.24%, indicating a higher probability of positive returns in the immediate aftermath of such a significant correction. The maximum return during the backtest period was 2.55% over 57 days, suggesting that while the stock may experience some volatility, it tends to recover and even exceed its previous levels.

Rebound or Reversal? Watch $285.89 as the New Battleground
Verisign’s selloff, while steep, appears overextended given its strong operational metrics and sector resilience. The 30D MA at $285.89 and 200D MA at $235.05 form a critical support/resistance zone. A break above $285.89 could reignite the 52-week high bid, while a drop below $273.59 (Bollinger band) would signal deeper trouble. Sector leader Godaddy’s -0.77% move underscores broader tech caution. Act now: Buy VRSN20250919C290 for a long-term play, or short-term VRSN20250815C290 if $290 breaks decisively.