Five months ago, Demand Media went public at $17 per share. Within a short time, the stock hit a high above $28 per share. It seemed like they hit the market at the perfect time. Internet stocks had once again become the favorites of Wall Street.
Flash forward to today, almost 6 months after that opening bell, Demand’s stock has tanked. It hit a low yesterday of 11 3/4. That means in a matter of a few months, the value of stock has gone down over ONE BILLION DOLLARS. Insiders, who have to wait 6 months after the IPO to sell their shares must be biting their nails as the value of their nest eggs continue to erode. My guess was that the stock would be around $10 at the six month mark. I guess in a few days we will all see what happens when additional shares are unloaded on the open market.
You bought shares when they went public Larry?
No. I have no shares in Demand, nor any other investment in them. (and I am not shorting the stock)
I think they also felt something was not so well as they wanted because when I contacted a pair of upper DemandMedia staff to congratulate them for become new millonaires both were very reserved, saying it was still not won!
The “lockup expiration” is July 25, 2011, so it’ll be interesting to see how many insiders start selling when they are finally able to do so (not counting the small amount they sold as part of the IPO).
One of Warren Buffet’s criteria for buying stock is that the company must have good management.
As a matter of fact, I do not own any Demand Media stock and I have no financial interest in the company.
Can someone more familiar with trading have a look at http://finance.yahoo.com/q/ks?s=dmd and tell me what a short ratio of 21.7 means? Will be interesting to see if that changes as we get closer to lockup expiration.
The short ratio is the total number of shares that have been sold short, divided by the average number of shares traded per day.
http://en.wikipedia.org/wiki/Short_ratio