Verisign Plunges 10.1%—Will the Buffett-Backed Giant Rebound or Reckon?

Summary
• Verisign (VRSN) slumps 10.1% to $274.955, hitting a 52-week low of $172.49
• Berkshire Hathaway sells 4.3M shares in a $1.22B secondary offering, reducing ownership to 9.6%
• Q2 earnings beat forecasts, but revenue misses expectations, sparking volatility

Verisign’s dramatic intraday plunge has sent shockwaves through the internet infrastructure sector, driven by Berkshire Hathaway’s strategic divestment and regulatory compliance concerns. With the stock trading near its 52-week low and key technical levels in play, investors face a critical juncture. The 30-day moving average at $285.89 offers a potential floor, while the 52-week high of $310.60 looms as a distant target. As the market digests this sell-off, the path forward hinges on liquidity absorption and earnings resilience.

Berkshire’s Exit Triggers Regulatory Relief and Investor Jitters
Verisign’s 10.1% intraday drop is directly tied to Berkshire Hathaway’s secondary offering of 4.3 million shares at $285 per share, a 6.9% discount to the previous close of $305.98. This move reduces Berkshire’s ownership from 14.2% to 9.6%, avoiding regulatory obligations tied to exceeding 10%. The discounted pricing and lack of market absorption for the large block of shares have intensified short-term selling pressure, compounding concerns about liquidity and investor sentiment despite the company’s strong Q2 operational performance.

Internet Sector Mixed as Alphabet A (GOOGL) Rises 1.36%
The broader internet sector shows mixed signals, with Alphabet A (GOOGL) rising 1.36% as of 2025-07-29 18:30:27. While Verisign’s sell-off is driven by a specific regulatory-driven exit, the sector’s resilience highlights divergent investor sentiment. However, the lack of leveraged ETFs tied to Verisign limits thematic capital flows into the stock, isolating its volatility from broader sector trends.

Options Playbook: Capitalizing on Volatility and Technical Breakouts
• 200-day MA: $235.05 (well below), RSI: 69.64 (overbought), MACD: 4.11 (bullish divergence), Bollinger Bands: Upper $301.29, Middle $287.44, Lower $273.59

Key levels to watch include the 30-day support at $280.94 and 200-day support at $280.12. A break below $270.12 validates deeper correction, while a rebound above $290.00 could reignite bullish momentum. The 52-week high of $310.60 remains a distant target.

Top Options:
• VRSN20250815P270 (Put Option): Strike $270, Expiry 2025-08-15, IV 29.54% (high), Leverage 165.13% (extreme), Delta -0.168 (moderate), Theta -0.0148 (slow decay), Gamma 0.01388 (moderate), Turnover $23,282 (liquid).
- IV (Implied Volatility): High volatility suggests potential for large price swings.
- Leverage Ratio: Extreme leverage amplifies gains if the stock drops below $270.
- Delta: Moderate sensitivity to price changes.
- Theta: Slow time decay preserves value over the option’s lifespan.
- Gamma: Moderate responsiveness to price acceleration.
- Turnover: High liquidity ensures ease of entry/exit.
- Why it stands out: Aggressive bears should prioritize this put into a break below $270.12. Under a 5% downside scenario (targeting $261.21), the put yields a $8.79 profit per share, translating to a 28.33% gain.

• VRSN20250919C290 (Call Option): Strike $290, Expiry 2025-09-19, IV 26.90% (mid-range), Leverage 137.88% (high), Delta 0.218 (moderate), Theta -0.2693 (rapid decay), Gamma 0.01789 (strong), Turnover $189,321 (highly liquid).
- IV: Mid-range volatility balances risk and reward.
- Leverage Ratio: High leverage rewards bullish bets if the stock rebounds.
- Delta: Moderate sensitivity to upward price movement.
- Theta: Rapid time decay pressures near-term execution.
- Gamma: Strong responsiveness to price acceleration.
- Turnover: High liquidity ensures trade execution.
- Why it stands out: Bulls should consider this call if the stock retests the $285.89 30-day MA with volume. A 5% upside scenario (targeting $288.70) yields a $8.70 profit per share, translating to a 7.78% gain. Aggressive bulls may consider VRSN20250919C290 into a bounce above $290.00.

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 Reckoning? Watch $270.12 and $290.00 in 72 Hours
Verisign’s short-term trajectory hinges on its ability to hold the $270.12 support level and retest the $285.89 30-day moving average. A break below $270.12 validates deeper correction, while a rebound above $290.00 could reignite bullish momentum. Investors should monitor the 52-week high of $310.60 as a long-term target but remain cautious on near-term volatility. With Alphabet A (GOOGL) rising 1.36%, the sector’s mixed performance underscores the need for precision in timing. Act now: Aggressive bears prioritize VRSN20250815P270 into a break below $270.12. Bulls consider VRSN20250919C290 if the stock closes above $290.00.