VeriSign Inc. (VRSN) shares plummeted 6.20% in pre-market trading on Tuesday following the announcement that Warren Buffett's Berkshire Hathaway would sell approximately one-third of its stake in the internet infrastructure and domain name registry company. The move marks a significant shift for Berkshire, which has been a long-term investor in VeriSign since 2012.

According to the announcement, Berkshire Hathaway affiliates plan to sell 4.3 million shares of VeriSign common stock in a secondary offering priced at $285 per share, generating gross proceeds of about $1.23 billion. This sale is strategically aimed at reducing Berkshire's ownership stake below the 10% threshold, which would trigger additional regulatory obligations. Prior to the offering, Berkshire owned about 14.2% of VeriSign, with its stake valued at approximately $4.07 billion based on Monday's closing price.

The market's negative reaction reflects concerns about increased share supply and the reduction of stake by a major shareholder. J.P. Morgan Securities is underwriting the offering, with the selling stockholders potentially granting a 30-day option to purchase an additional 515,032 shares. It's worth noting that VeriSign will not receive any proceeds from this transaction, as it involves existing shares held by Berkshire Hathaway affiliates. Following the offering, any remaining shares owned by Berkshire will be subject to a 365-day lock-up agreement, which could provide some stability to the stock price in the medium term.