Newly-public Demand Media, which Seeking Alpha calls “a terrible company” with a fair market price of about $0, had its IPO six months ago at a $1.4 billion valuation and carried a half-way decent share price that hit a high of around $24 but has been rockily falling toward the $13 range, where it was last month. But this week DMD’s insider lockout–the period of time during which company executives are prohibited from selling stock–just expired. And as of yesterday afternoon, the stock is tanking.
The easy conclusion is that insiders are dumping their stock because they know their company is a content farm that has little future as Google cracks down on sites that cater aggressively to search engine traffic with content that’s little more than search terms surrounded by related words. But it’s not because insiders are selling, the financial blogs say–Demand has had a collapse in demand. Just like traffic from Google, demand for Demand Media has simply been… shut off. Read More