Network Solutions hits new mark
Buoyed by a ruling on domain registrations, Network Solutions' stock surges nearly 10 percent to a new 52-week high.
The company's stock surged nearly 10 percent to a new 52-week high today, buoyed by a federal judge's ruling on domain registrations. In the suit, the plaintiffs argued that NSI's agreement with the National Science Foundation gave the company an illegal monopoly, and the judge dismissed that part of the suit.
The company's stock rose 3-3/4, to 43, in today's trading.
"The decision is...a clear statement that Network Solutions can continue to provide a stabilizing influence on the ever-growing Internet," Gabe Battisa, chief executive of NSI, said in a statement. NSI shares have traded as high as 40-3/8 and as low as 11-3/4 during the past 52 weeks. The company went public only last September.
At the time of its IPO, many analysts were bearish on Network Solutions, noting the looming competition in the domain-name registration business. The company has been the exclusive registrar for second-level domain names within the ".com," ".org," ".net," and ".edu" top-level domains, but a plan to open the process to more competition already is being finalized.
In the meantime, NSI is proving its naysayers wrong--at least for now. Like many Net stocks, it has rallied sharply of late.
Unlike many Net stocks, however, NSI is turning a profit. It also has been beating Wall Street's estimates. For the three months ended December 31, 1997, NSI posted net profits of $1.7 million, or 11 cents per share, up from $126,000, or 1 cent per share, reported for the fourth quarter of 1996. Quarterly revenue rose to $45.3 million, from $18.9 million.
Earlier this week, the company announced plans to expand marketing channels in the Asia-Pacific region. It inked a deal with Domain Asia, a New York-based firm, to help establish channels in China, Korea, Taiwan, and Hong Kong.
Risks remain, however, not only from competition, but from further legal challenges.