Ahead of the Bell: VeriSign tanks after 3Q results
NEW YORK (AP) — Shares of VeriSign. took a hit on Friday after the company released what one analyst called "expectedly lackluster" results and said that the U.S. Commerce Department and the Department of Justice were investigating its .com pricing terms.
VeriSign Inc. registers domain names on the Internet. Citi Investment Research analyst Walter Pritchard said the government's review of the company's contract pricing terms is an "unexpected development."
"We were able to check with domain industry sources, who note that the DoJ hasn't broadly queried industry participants on their views on price, which suggests the investigation is in early stages or not prompted by industry pressure," Pritchard wrote.
The agency that oversees Internet addresses, the Internet Corporation for Assigned Names and Numbers, approved a renewal of VeriSign's contract earlier this year, but it is being reviewed by the Commerce Department. The contract includes operating a database that helps in finding websites and routing email.
If the review of the company's registry agreement is not completed before it expires on Nov. 30, it could trigger a six-month extension of the contract renewal process. The company, Pritchard, noted, "wasn't able to give more detail than this."
The uncertainty seemed to weigh on VeriSign's stock. Its shares fell $7.80, or 16.7 percent, to $38.80 in premarket trading.