VeriSign Inc, which manages a directory of Internet addresses, fell the most since November 2012 amid concern that its business may be hurt by a U.S. plan to shift control of the system for assigning website addresses.
The stock dropped 5.8 percent to $51.68 at the close in New York, leaving it down 14 percent this year. Earlier, the shares slid as much as 11 percent.
The U.S. government on March 14 said it would fulfill a pledge it made as far back as 1998 to relinquish control of the Internet’s domain-name system. Gregg Moskowitz, an analyst at Cowen & Co., said the change in control and oversight increases the risk that VeriSign may not be able to renew its contracts in their current form to maintain the dot-com and dot-net registries.
“With the introduction of oversight uncertainty, and multiple stakeholders, we potentially could in a few years’ time see a less favorable outcome than present upon time of renewal,” Moskowitz wrote in a note today. He reduced his rating on the stock to the equivalent of hold from buy, while saying it’s unlikely that VeriSign will lose the dot-com contract when it comes up for renewal in 2018.
In a statement today, VeriSign said the National Telecommunications and Information Administration’s announcement doesn’t affect the company’s operation of the dot-com or dot-net registries, and that its agreements have presumptive rights of renewal.
“The announcement does not impact VeriSign’s dot-com or dot-net domain name business,” the Reston, Virginia-based company said in the statement. “The NTIA announcement involves Internet functions that are entirely different functions from those VeriSign performs under its dot-com and dot-net agreements.”