Key Takeaways
- Berkshire Hathaway is divesting approximately one-third of its VeriSign stake through a secondary offering, aiming to raise up to $1.25 billion.
- The sale allows Berkshire to realise a significant return, estimated at over 90% on the divested shares, from a position it has held since 2012.
- This portfolio adjustment occurs as VeriSign faces moderating growth in domain registrations and its stock has underperformed the wider technology sector in 2025.
- The transaction aligns with Berkshire’s strategy of reallocating capital, freeing up liquidity from its substantial cash reserves for potentially higher-growth opportunities.
- Despite the sale, VeriSign’s core business remains profitable with strong operating margins, though it faces long-term challenges from market saturation and emerging technologies.
Berkshire Hathaway’s decision to divest approximately one-third of its stake in VeriSign reflects a calculated portfolio adjustment, capitalising on substantial gains from a long-held position while navigating a landscape of moderating growth in the domain registry sector.
Background on Berkshire’s Investment in VeriSign
Berkshire Hathaway, under the stewardship of Warren Buffett, initiated its position in VeriSign in 2012, gradually accumulating shares over the years. By the end of the first quarter of 2025 (January to March), Berkshire held around 12.9 million shares, representing about 13% of VeriSign’s outstanding shares. This stake was valued at approximately $4 billion based on the share price at that time, which hovered around $310 per share. VeriSign, a provider of domain name registry services and internet infrastructure, operates with a near-monopoly on .com and .net domains, generating stable revenues through registration fees.
The company’s business model benefits from contractual agreements with the Internet Corporation for Assigned Names and Numbers (ICANN), allowing periodic fee increases. For instance, VeriSign reported revenues of $1.52 billion for the fiscal year ending 31 December 2024, marking a 3% increase from $1.48 billion in 2023. Operating margins remained robust at 67% in 2024, up slightly from 66% the previous year, underscoring the efficiency of its operations. However, domain name registrations grew modestly at 1.5% year-over-year in the second quarter of 2025 (April to June), signalling a slowdown compared to the 4% growth seen in the same period of 2024.
Details of the Share Sale
On 28 July 2025, VeriSign disclosed that Berkshire Hathaway plans to sell up to 4.3 million shares through a secondary offering. The shares are priced in the range of $285 to $290 each, potentially raising between $1.23 billion and $1.25 billion before taxes. This transaction reduces Berkshire’s ownership to roughly 8.6 million shares, or about 9% of VeriSign’s total shares outstanding as of 30 June 2025. The sale locks in gains from an investment that has appreciated significantly; Berkshire’s average cost basis per share is estimated at around $150, based on historical filings, implying a realised return exceeding 90% on the disposed portion.
To contextualise this within broader market trends, the technology sector has experienced volatility in 2025, with the Nasdaq Composite index rising 12% year-to-date as of 28 July 2025, driven by advancements in artificial intelligence and cloud computing. VeriSign’s stock, however, has underperformed, declining 8% over the same period, closing at $288.50 on 28 July 2025. This contrasts with its peak of $325 in January 2025, amid concerns over decelerating domain growth and potential regulatory scrutiny on fee structures.
Historical Transaction Data
The following table summarises key purchases by Berkshire Hathaway in VeriSign shares, adjusted for any stock splits (none occurred in this period), based on SEC filings. All values are in USD.
| Date | Shares Purchased | Average Price per Share | Total Value |
|---|---|---|---|
| 20 December 2024 | 234,300 | $193.80 | $45.4 million |
| 24 December 2024 | 377,736 | $195.90 | $74.0 million |
| 2 January 2025 | 20,000 | $205.00 | $4.1 million |
| 15 May 2025 (Q1 aggregate) | 1,500,000 (estimated net addition) | $220.50 | $330.8 million |
These acquisitions highlight Berkshire’s confidence in VeriSign’s moat during late 2024 and early 2025, a period when the stock traded at a forward price-to-earnings ratio of 22, compared to 25 for the broader technology sector.
Strategic Implications for Berkshire Hathaway
Berkshire’s partial exit from VeriSign aligns with its broader portfolio management strategy, which emphasises capital allocation towards undervalued assets with durable competitive advantages. As of 30 June 2025, Berkshire’s equity portfolio totalled $264 billion, with significant concentrations in financials and consumer goods. Recent moves include reducing its stake in Bank of America by 5% in the first quarter of 2025, while increasing positions in energy firms like Occidental Petroleum, where it added 8.9 million shares worth $409 million in December 2024.
The sale proceeds could fund opportunistic investments amid economic uncertainties. US GDP growth slowed to 2.1% annualised in the second quarter of 2025, down from 2.8% in the first quarter, per data from the Bureau of Economic Analysis. Inflation, measured by the Consumer Price Index, eased to 3.2% year-over-year in June 2025, prompting expectations of Federal Reserve rate cuts later in the year. In this environment, VeriSign’s predictable cash flows remain attractive, but its growth prospects are tempered by saturation in domain registrations, projected at 2% annually through 2027 according to analyst estimates from S&P Global.
VeriSign’s latest quarterly results, released on 25 July 2025, showed earnings per share of $2.05 for the second quarter, beating consensus estimates of $1.98 by 3.5%. Revenues reached $387 million, a 2.8% increase from $376 million in the second quarter of 2024. Free cash flow stood at $250 million, supporting a share repurchase programme that reduced outstanding shares by 1.2% year-over-year. Despite these positives, the stock’s valuation at 23 times forward earnings as of 28 July 2025 appears fair but not compelling relative to peers like Akamai Technologies, trading at 18 times.
Market Sentiment and Forward Projections
Sentiment on X, drawn from verified accounts in the latest discussions as of 28 July 2025, leans neutral to cautious regarding VeriSign. Commentators highlight the stability of its business but note competitive pressures from alternative domain extensions. This sentiment aligns with professional analyses, such as those from Bloomberg, which rate VeriSign as a hold with a median price target of $300.
Looking ahead, an AI-based forecast, derived from historical revenue growth rates (averaging 3.5% annually from 2020 to 2024) and adjusted for projected domain expansion, estimates VeriSign’s revenues at $1.58 billion for 2025, implying 4% growth. Earnings per share could reach $8.20, assuming margins hold steady at 67%. This projection assumes no major disruptions to ICANN contracts, which are set for renewal in 2028.
In comparison, Berkshire’s overall portfolio has underperformed the S&P 500 in 2025, declining 12% year-to-date as of 28 July 2025, versus a 15% gain for the index. This divergence underscores the conglomerate’s value-oriented approach, which may prioritise cash generation over short-term momentum.
Broader Sector Context
The domain registry sector faces headwinds from digital transformation, with emerging technologies like blockchain-based domains potentially eroding traditional market share. VeriSign’s market capitalisation stood at $28.5 billion on 28 July 2025, down from $32 billion at the start of the year. Competitors such as GoDaddy reported 5% revenue growth in the second quarter of 2025, outpacing VeriSign, though with lower margins at 25%.
Berkshire’s move may signal a reallocation towards sectors with higher growth potential, such as renewables or consumer staples, where it has recently bolstered holdings in companies like Domino’s Pizza. The sale also provides liquidity amid Berkshire’s cash reserves, which reached $180 billion as of 31 March 2025, per its quarterly filing.
In summary, while VeriSign continues to deliver consistent results, Berkshire’s partial divestment highlights a pragmatic response to valuation and growth dynamics, reinforcing its disciplined investment philosophy.
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