Last Friday, April 9th, after the close of trading, Network Solutions, Inc. (NASDAQ Symbol: NSOL) (Price: $108.00) re-established an InterNIC web site, which it had eliminated two weeks ago. U.S. taxpayers paid for the development of the InterNIC web site. The InterNIC site allowed access to Internet domain name availability and registration services separate from NSOL’s registration site. After eliminating InterNIC, NSOL used the InterNIC’s web address to take visitors directly to its own registration site. InterNIC is a registered service mark of the U.S. Department of Commerce (“DOC”). NSOL did not obtain permission, and has no known authority, to have eliminated InterNIC and redirected InterNIC traffic to its own site. The DOC immediately publicly objected to NSOL’s actions. We believe that Friday’s action is insufficient and that NSOL must restore a fully functioning InterNIC registration site or face a severe government response.
The unauthorized use of U.S. government property by a government contractor is a serious offense. These developments may indicate that the U.S. government has acted already against NSOL. NSOL’s willingness to take such a dangerous risk, especially during the difficult ongoing registry price negotiations, may also indicate that it has exhausted all its other tactics to delay the delivery of a Shared Registry and the scheduled termination of its entire domain name government contract. Mechanisms for the orderly termination of NSOL’s contract are already in place. We know no operational or technical reason that prevents the DOC from simply transferring all of NSOL’s functions to another party. We see no reasonable basis for NSOL or its promoters to claim that the InterNIC actions reflect favorably on the possible outcome of NSOL’s termination.
Short selling involves a risk not associated with the purchase of stock including, but not only limited to, unlimited loss and stock borrowing risks. Additional information is available upon request.