An Update
A small update from myself, if you’ll allow me. After a boozy week at the Gold Coast catching up with work colleagues (I work for a software business/digital agency that is 90% remote/WFH) I had a revelation.
Like all my good ideas, I find that they come from the following algorithm: (context + insight +/- caffeine and/alcohol)*walking. Good writing is a slightly different equation, but I digress.
My revelation was to institute an end-of-week piece, that would dump synthesised research materials that have informed the previous week’s publications. The learning process continues, but it’s messy and haphazard. Putting together a presentable and cogent bibliography of material will be helpful for me, and hopefully informative for you.
In any event, you are more than welcome to disregard it at your leisure - my plan for this is to be technical, rather than easily consumed. I find after each post I get a number of reply emails from friends and readers (I consider them one in the same), and this can also act as my right of reply. I am finding that many readers here are investment professionals, and so a public comments section is likely not a forum well suited to the demands of that calling.
Continuing on:
Notes on Verisign
Recently, Value Investor’s Club has become something of a shadow of it’s former self. If I were to explain why, it would be simple: good investment ideas do not mechanically present themselves at convenient six month intervals. Writers are forced to submit relatively mediocre ideas on a rote basis, hence the degrading quality of the forum generally. However, there has been some pretty good research submitted on Versign over the years:
Excerpts from a 2010 submission by user kwee12:
Verisign is a fallen angel of the dot com era and recently completed a $750m divestiture of non-core operations to focus on its domain name registry, SSL certificate and identity / authentication businesses.
Verisign's domain name business operates the master registry for the .com and .net top level domains ("TLDs") and receives a fee for every registered .com and .net domain; it is essentially a monopoly regulated by the Internet Corporation for Assigned Names and Numbers ("ICANN"). Verisign manages a global database of ~95m .com and .net domains to a very strict SLA (100% uptime for 11 years), and generates significant cash flow with tremendous operating leverage. Despite a pending antitrust lawsuit launched by the Council for ICANN Transparency (CFIT), Verisign announced 12/09 that they would increase .com rate from $6.86 to $7.34 and the .net rate from $4.23 to $4.65 effective 7/10.
These were the key characteristics I tried to present in my own writing:
Regulated monopoly,
An excellent operator,
Operating leverage,
Extremely profitable,
Pricing power.
Keep reading with a 7-day free trial
Subscribe to Buyback Capital to keep reading this post and get 7 days of free access to the full post archives.