Personally I think the stock will move higher from here.

The final judgment on this lawsuit, as bad as the potential outcome could be is years away, plus appeals time.

Investors reaction is short lived in this type of situation.

Shares of VeriSign fall 14% today, in reaction to the courts ruling.

More at:

http://www.thedomains.com/2009/06/08/verisign-shares-fall-14-on-appeals-court-ruling/

I am not being moralistic, but economic and legalistic (noting of course that the law should be rooted firmly in economic reality and morality). The very heart of the CFIT litigation is a charge that VeriSign has been operating .com under a contract secured by violating the law, and that ICANN set aside its responsibilities to registrants and registrars in exchange for disposing of the litigation brought against it by VeriSign in exchange for a multi-$million payment (and there is no dispute that they received those funds).

ICA supported the CFIT appeal because we believe that VeriSign is reaping excess profits exceeding an estimated $1 billion over the five year course of the current .com registry contract, in comparison to what the base price and allowable increase provisions would have been in any contract arrived at through the proper course of competitive bidding. This would be true even if VeriSign was the winning bidder, as they were for the .net contract, where the base price was $4.25, not the $6 for .com — pricing for .com should be lower, in the $3-4 range, given the much larger number of domain registrations and accompanying economies of scale (and there were bidders out there willing to operate the registry at that price level, had they been allowed to compete for it). This is not to say that we approve of the lack of price caps in and the presumptive renewal provisions of the .net contract, but these are problems related to ICANN’s misplaced priorities.

As for misconduct, the 9th Circuit Court of Appeals just held that CFIT’s allegations of “predatory and harassing” activities that accompanied the state and federal lawsuits brought against ICANN by VeriSign to prevent a competitive rebid of the .com contract are, if proved, sufficient to sustain a finding of activities to create and perpetuate a monopoly in violation of U.S. antitrust law. That is the illegal misconduct I alluded to, and it has to do with fact, not morality. If the District Court goes on to find that the evidence supports those allegations it will find conduct that was illegal — whether it was immoral I leave to the individual readers of The Domains to decide.

Its the position of CFIT that VeriSign has NOT been operating within the law, actually violating the Federal and State anti-trust laws for one.

Read the entire opinion of the court that is referenced in the post, they layout the arguments quite well.

VeriSign is a monopoly so the rules must be different for them, than for you.

If you register or renew a .com or .net you are paying VeriSign, you have no choice.

If you want to buy an aftermarket domain and the guy wants $10K for it, you can elect to buy it, or find another cheaper alternative.

With VeriSign you have no such choice

As for next steps on the lawsuit, VeriSign has very deep pockets filled with excess profits from the registry contracts so expect them to drag this out as long as possible given the stakes for them –and then to argue at some point that the gTLD space has fundamentally changed so as to diminish their market power (not that this would excuse past misconduct, regardless of its truth). On the other hand, going to trial will allow for discovery of previously unseen documents, and there may be a chance to get some examination of this deal by the new Administration’s antitrust lawyers, who are already a lot more active than those of the former regime.