VeriSign, Inc. (VRSN): A Bear Case Theory 

We came across a bearish thesis on VeriSign, Inc. on X.com by MinusCherry. In this article, we will summarize the bulls’ thesis on VRSN. VeriSign, Inc.’s share was trading at $253.67 as of December 2nd. VRSN’s trailing and forward P/E were 29.26 and 25.77 respectively according to Yahoo Finance.

VeriSign, Inc., together with its subsidiaries, provides internet infrastructure and domain name registry services that enables internet navigation for various recognized domain names worldwide faces a challenging outlook over the next 12 months, driven by structural pressures in its core .Com domain business. YTD growth has been supported by high-churn registrars leveraging aggressive rebate programs, sometimes offering discounts of up to 50% to meet growth targets, effectively transferring the cost burden to the registrars themselves.

While this has temporarily inflated domain sales and contributed to the stock’s ~30% YTD gain, the underlying growth is unsustainable. As these first-year promotional domains renew at lower rates and churn-prone registrars slow acquisition, Verisign’s .Com domain base is expected to decline in FY2026, reversing a key growth driver.

Compounding this, approximately 30% of .Com domains are parked, generating advertising revenue that has recently collapsed by 85–90% following Google’s ban on ads for parked domains. This sudden revenue loss makes it uneconomical for many non-operational domains to remain registered. With fewer than 30% of .Com domains representing active websites, this points to a broader secular trend of market rationalization, as excess and unprofitable domains are eliminated.

Together, these factors create near-term headwinds for both growth and revenue. Registrar-driven rebates are unlikely to continue at scale, renewal rates are poised to revert, and parking revenue is structurally impaired. While the stock has benefited from temporary tailwinds, FY2026 is likely to bring negative net .Com domain growth and pressure on overall revenues, presenting a compelling near-term risk for investors and supporting a bearish investment thesis.

Previously we covered a bullish thesis on Cloudflare, Inc. (NET) by Oliver | MMMT Wealth in April 2025, which highlighted its scale, network effects, 20%+ revenue growth, and approaching profitability. The company’s stock price has appreciated approximately 88.42% since our coverage. The thesis still stands as Cloudflare expands its platform. MinusCherry shares a contrarian view, highlighting structural headwinds in VeriSign’s .Com business.

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Disclosure: None.