VeriSign Shares Gain After Credit Suisse Upgrade

NEW YORK (AP) — VeriSign Inc. shares gained modestly Wednesday, helped by a report from Credit Suisse casting doubt on fears that the company's Internet domain business could be hurt by a pending lawsuit.

Shares edged up 47 cents, or 2.5 percent, to $19.59 in afternoon trading, after Credit Suisse analyst Philip Winslow upgraded the company to "Outperform" from "Neutral."

VeriSign faces antitrust accusations from the Coalition for ICANN Transparency. ICANN stands for Internet Corporation for Assigned Names and Numbers, the nonprofit agency that has oversight of Internet domain names. The coalition alleges that VeriSign, which runs some of the key directories that computers need to find Web sites, has colluded with ICANN to keep prices for domain names artificially high and put unfair restraints on competition for the right to manage the domains.

A California district court threw out the case, but the Ninth Circuit Court of Appeals reversed the decision in June.

The case has stirred concern among investors that the Mountain View, Calif., company might face lower prices or lose the business altogether. Shares are down about 16 percent since the Ninth Circuit decision.

"Although the possible negative outcomes of the still-pending litigation would produce dramatically negative financial results," Winslow told clients in a note, "we view either of these two outcomes as unlikely."

Winslow added that investors appear to have already figured those risks into VeriSign's stock price.