VeriSign, the main manager of the Internet-address database, dropped the most in a month after a new contract allowed the company to continue controlling web sites ending in .com curbed its ability to increase prices. Its shares fell 13 percent to $34.15 at the close of trading in New York. It was its biggest decline since October 26. It reversed the previous gain and now lost 4.4 percent this year.
The US Department of Commerce approved VeriSign’s contract renewal through November 30, 2018 that would allow the company to maintain current pricing of $7.85 per domain name registration. VeriSign doesn’t have the right to four price increases of as high as 7 percent over the term of the contract. That option was part of the previous deal. That would have allowed VeriSign to increase the price from the present $7.85 to $10.29 in four years. The Commerce Department decided that the price was enough and doesn’t require further price increases.
In October and November, VeriSign repurchased 1.4 million shares for $62 million. It left $548 million in its present buyback program according to Chief Executive Officer Jim Bidzos. He said that the the company is in a good position despite the lack of pricing terms from the previous agreement.
VeriSign supervises the registry of the internet. It translates the words in an internet address into the numbers that a computer server understands. The company also works with others that sell .com addresses. Those firms pay VeriSign for the service that connects words to the correct Internet address.
Under the new contract that was negotiated between VeriSign and the Internet Corporation for Assigned Names and Numbers, prices will be limited to instances when there are extraordinary expenses related to stability or security threats. It now requires the Commerce Department to approve the price increases. ICANN declined to comment about the issue.