After holding for 13 years, Berkshire Hathaway significantly sold one-third of its position in VeriSign
Berkshire has held shares in the company since 2012. At that time, VeriSign's stock price was only $49.50, far below the current trading level, which means that the shares Berkshire cashed out have yielded more than five times the return. According to the statement, the remaining shares of VeriSign held by Berkshire will be subject to a one-year lock-up period
Berkshire Hathaway, led by Warren Buffett, announced the sale of approximately one-third of its holdings in the technology stock VeriSign, cashing out about $1.23 billion.
On July 29, according to media reports, Berkshire Hathaway sold 4.3 million shares of VeriSign at a price of $285 per share, a discount of 6.9% compared to Monday's closing price of $305.98. After the sale, Berkshire's ownership stake in VeriSign will decrease from 14.2% to 9.6%.
The core driving factor behind this transaction is regulatory considerations. Reducing the ownership stake to below 10% allows Berkshire to avoid the stricter reporting obligations and trading restrictions imposed by the U.S. Securities and Exchange Commission (SEC) on major shareholders.
VeriSign's stock price fell nearly 7% in after-hours trading on Monday in response. The stock had previously performed strongly, rising nearly 48% year-to-date and reaching an all-time high during Monday's trading session, and this large-scale sale undoubtedly reversed that momentum.
According to the statement, the remaining shares of VeriSign held by Berkshire will be subject to a one-year lock-up period, meaning there will be no further large-scale sell-offs in the short term.
A Successful Investment Begun in 2012
Berkshire's investment in VeriSign is considered a classic long-term value investment.
Since 2012, Berkshire Hathaway has held shares in the company. At that time, VeriSign's stock price was only $49.50 at its peak, far below the current trading level, indicating that the shares Berkshire is cashing out have yielded more than five times the return.
Interestingly, despite being a net seller of the stock for ten consecutive quarters ending in March of this year, Berkshire was still increasing its holdings in VeriSign in January.
Before this sale, regulatory filings showed that as of March 31, Berkshire held nearly 13.3 million shares of VeriSign, with a market value of approximately $4.07 billion based on Monday's closing price.
It is worth noting that such relatively small-scale technology stock investments are typically considered to be led by Buffett's investment deputies Todd Combs and Ted Weschler
