Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Internet infrastructure services company VeriSign (VRSN -1.12%) sank 13% today after announcing that its newly revised ".com" registry agreement was approved by the U.S. Department of Commerce, but with certain conditions.
So what: While the company will maintain its status as a major Internet registry operator through Nov. 30, 2018, it no longer has the right to four automatic price increases of up to 7% over the term. Given the fact that ".com" represents about 85% of VeriSign's domain registries, analysts are naturally concerned that the impact on top-line growth will be significant.
Now what: Although VeriSign's ability to raise prices has been hampered, the renewal itself removes a huge cloud of uncertainty that was previously hanging over the stock. "This certainty, combined with our strong portfolio of assets," said Chairman and CEO Jim Bidzos, "positions us well to participate in the growing global market for Internet registry and infrastructure services." With the stock hitting a new 52-week low today and trading at a forward P/E of 14, patient Fools might want to use today's pullback to buy into that long-term bullishness.
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