Verisign Stock Dips As Sen. Warren Reportedly Demands Probe Into 'Excessive' Pricing: Retail Shrugs It Off
By Stocktwits Inc | First Published Nov 23, 2024, 12:43 AM ISTThe company started charging $10.26 for .com registrations from September.
Shares of Verisign Inc. ($VRSN) fell over 1% on Friday afternoon, poised to end a three-day winning streak after Senator Elizabeth Warren and Congressman Jerry Nadler called for an investigation into the company’s pricing practices.
The lawmakers’ letter to the Department of Justice and the National Telecommunications and Information Administration accuses Verisign of exploiting its monopoly over “.com” web addresses to impose “excessive prices” on customers, Wired.com reported.
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Verisign, which administers the .com top-level domain, has faced criticism for its pricing structure.
For years, federal caps limited registration costs to $6, which rose to $7.85 during the Obama administration.
However, the Trump administration lifted the cap in 2018, allowing Verisign to increase prices by up to 7% annually.
The company started charging $10.26 for .com registrations from September.
Critics argue that Verisign’s monopoly, guaranteed through a government contract, has allowed it to raise prices without improving services, effectively taking advantage of customers with limited alternatives.
Antitrust advocates have also urged the Biden administration to open the registry contract for competitive bidding when it expires next year.
Verisign, which generated $1.5 billion in revenue last year, has not issued a public response to the latest criticism.
However, an August blog post from the company reportedly disputed claims of monopolistic practices.
Retail sentiment was ‘extremely bullish’ on Stocktwits on Friday afternoon, with high message volume.
Optimism appears to be driven by Verisign’s recent earnings and guidance. The company exceeded third-quarter estimates with earnings per share of $2.07 versus $2.01 expected, and revenue of $390.6 million, slightly above the $390.2 million consensus.
Verisign also raised its full-year revenue guidance to $1.54 billion-$1.59 billion, signaling strong financial performance despite a 2.5% year-over-year decline in its domain name base.
The company processed 9.3 million new domain registrations for .com and .net in Q3, down from 9.9 million in the same period last year.
The return of Donald Trump as president could also be quelling some worries, as his administration is perceived to be less stringent on regulations and more business-friendly.
VRSN stock has lost more than 9% year-to-date.
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