VeriSign Slumps As CEO Leaves, Analyst Meeting Postponed

VeriSign (VRSN) Tuesday morning announced that long-time CEO Stratton Sclavos has stepped down as an officer and director of the company. He is replaced by William A. Roper, Jr., already a director of the company. Roper has been Executive Vice President of Science Applications International [SAI].

The company did not specifically give a reason for the change. It did allude to its stock-options backdating problems, though: “As previously disclosed, the review of the company’s historical stock option grant practices by an ad hoc group of independent members of VeriSign’s Board of Directors is substantially completed,” the company said in a statement.

The review did not find intentional wrongdoing by any current member of senior management, including Sclavos.

Jonathan Hoopes, an analyst at ThinkEquity, responded to the news Tuesday morning by downgrading the stock to “Source of Funds” from Accumulate. “While no reason for Sclavos’ exodus was given, it appears that Sclavos is going to be a ‘fall guy’ for the ongoing stock option pricing debacle at VeriSign,” he says.

Hoopes says he is now “biased toward the downside,” noting that the company remains behind on its SEC filings; he also wonders if the current CFO could also be on the way out. “We encourage investors to reduce holdings based on the ‘cockroach theory’,” he says.

VeriSign is down 20 cents at $27.05.

VRSN 1-yr chart: