Internet address database company Verisign (NASDAQ:VRSN) Thursday said its CFO Dana Evan resigned, as the company disclosed the results of an options grant investigation that found there was “relatively little oversight” of the company’s grants and that the company would record $160 million in additional expenses to correct irregularities in those grants.
Verisign has filed a delayed 2006 10K and delayed second and third quarter 10Qs for last year with the Securities & Exchange Commission. Dana’s departure was more-or-less expected following the departure at the end of May of long-time chief executive Stratton Sclavos. The options investigation said there was no wrongdoing found by either party in options grant assignments.
And Friday, wouldn’t you know, the shares rose 2.79% to $33.91 on what seems to be a sigh of relief as Jeffries & Co. analyst Katherine Egbert raised her rating on the stock from Hold to Buy and offered a $39 price target for the shares, which is one of the higher price targets on the stock, but not as high as Deutsche Bank’s Todd Raker, with a $45 price target.
There were similar sighs of relief on the Street:
CIBC World Markets analyst Shaul Eyal reiterated a Sector Outperformer rating on the stock, with a price target of $35. Hard to see there being much outperformance with a price target 6% above the current price. But I digress. Eyal says Evan’s departure is a positive development for the company. The resolution of most of the options matter removes an “overhang” to the stock, writes Eyal, allowing Verisign to get back to talking about its future product intentions, perhaps as soon as the fiscal report due July 26. Eyal notes Verisign has authorized $1 billion in share repurchases, another positive for the stock. And Stifel Nicolaus analyst Todd Weller says the filing of the delayed financial statements should allow Verisign to move ahead with those share repurchases. Weller is another analyst who, like Eyal, has a price target with not much upside but a Buy rating nonetheless. He says Verisign shares are at his price target of $33, but that that target is under review, and that he likes the potential for margin expansion at Verisign, high growth prospects (earnings should grow 30% next year), and the prospect that the company will jettison some underperforming parts of its business.