VeriSign: One of America's most admired companies is undervalued

I am sorry George I could not disagree with you more. Currently I rate this stock as a sell and will short it prior to the Q1 figures being released. The primary reasons being:
SEC investigation:
VRSN is currently undergoing an SEC investigation and are expected to restate earnings for the last number of years. This is fairly significant insofar that immediately after the announcement of the investigation, two senior exec’s and one non-exec resigned their positions. Of course I am using a “no smoke without fire” analogy here which is of course speculative at best.

Personnel and divisional consolidation:
With the purchase of Encode recently and the appointment of John Donovan as group head of sales we are now seeing their fifth corporate reorganization in just twelve months. As someone who is on the MNO side of things I can attest to the fact that we have seen four different account managers turn up at our offices in recent times to manage our account. This does not send a message of confidence from the customer’s perspective. Indeed it would now seem that there have been wholesale changes within the sales division with the majority of the key sales positions being taken over by the former Encode management and sales team.

Naturally in this space, we are dealing with incredibly technical and complicated solutions. Which basically means that while the new sales team could turn out to be stellar; there will be a learning curve to develop the skills needed to sell the aforementioned solutions. I am currently forecasting VeriSign to miss their numbers over the next three to four quarters because of this; these are not insignificant revenues. Generally when you replace a sales group in this manner you can expect to see targets missed by a range of between 30%-40% which is pretty significant. Obviously I could be wide off the mark on this and I could find out to my financial detriment on the day of the quarterly report if I am.

M&A:
While I have been deeply impressed with most of VRSN’s activity over the last four years I was surprised that they retained any stake within the Jamba/Jamster brands; you made an excellent point concerning the OPEX drain that Jamba AG had on the groups books, however the OPEX drain is still there due to the fact that VeriSign still hold 49% of Jamba.

In addition Newscorps performance over the last 48 months insofar that Mobizzo has been a mobile entertainment flop of epic proportions for Lucy Hood and Co. Thus I fear that we will see a further decline in VRSN’s B2C revenues over the coming months.
On the B2B side we have seen VRSN make a number of wise purchases within the mobile value added services space and in addition the acquisition of Kontiki last year on the video streaming side. Naturally there is always going to be churn in this regard, however a number of the senior management from the likes of M-cube, Kontiki, litesurf, 3United etc have appeared on Moconews.net as having acquired new positions outside of the VRSN family. This concerns me deeply; having acquired a number of small entities myself over the years providing services to the MNO space, I have found that initial acquisition success is vigorously tied to keeping the core management teams together for as long as possible. After all one could surmise that the management team of any target acquisition company were key to the company’s initial success and partially the reason for the company being an acquisition target.

Overall I do feel that VRSN is a strong company; however I also see the organization as being mismanaged. Naturally with the SEC investigation in full swing now we will see earnings restated shortly and we will also discover if my prediction of a steep earnings drop will prove to be correct. While I respect your views on the CEO; I feel perhaps a change is warranted to help turn the organization around and to give it stability.