PointState Capital Increases Verisign Position ~ 13G Filing ~ market folly

Monday, December 10, 2012

PointState Capital Increases Verisign Position ~ 13G Filing

Sean Cullinan's hedge fund firm PointState Capital filed a 13G with the SEC regarding shares of Verisign (VRSN).  Per the filing, PointState has disclosed a 3% ownership stake in the company with 4,666,670 shares.

The filing was made due to trading activity on November 29th and marks an increase of 158% in the number of shares they own since the end of the third quarter.

The November 29th date is relevant here, mainly because the day after that, shares dropped from $40 to $34 on news that Verisign won the .com domain renewal, but wasn't going to be allowed to raise prices by the government.  Since then, shares have slightly rebounded back to around $37.

Hedge fund Lone Pine Capital has also been long Versign and we've highlighted Steve Mandel's pitch on VRSN from the Invest For Kids Chicago event last month.  Mandel argued that even if no price increases are allowed by the government, the downside is low.

The company recently announced it would double its stock repurchase plan to $1 billion.

About PointState Capital

This is the first time we've highlighted this fund, so here's some background: Point State was founded with around $5 billion a few years ago by former colleagues of Stan Druckenmiller's at Duquesne Capital.  Druckenmiller himself invested in the fund but does not have an ownership stake. 

Sean Cullinan is the CEO of Point State while other former Duquesne portfolio managers are there as well.  Point State is named after a park in Pittsburgh by the location of the old Fort Duquesne.

About Verisign

Per Google Finance, Verisign is "a provider of Internet infrastructure services. The Company provides domain name registry services and infrastructure assurance services. VeriSign segment includes Naming Services, which consists of Registry Services and Network Intelligence and Availability (NIA) Services. The Company has operations inside, as well as outside the United States. Registry Services operates the directory of all .com, .net, .cc, .tv, and .name domain names and the back-end systems for all .gov, .jobs and .edu domain names."

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