On the Date Restricted Shares of Demand Media Unlock & The Market Sinks, Demand Is Actually Up

Demand Media went public on January 26th, 2011.

Shares that insiders receive typically have a 6 month lock up meaning none can be traded until the 6 month period is up.

Meaning that today would be the 1st day that the insider shares can be sold.

Well the stock market is having a horrible day down as of time of publication around 175 points on the Dow and a whopping 68 points on the NASDAQ and shares of Demand Media are actually up .01.

Lets face it a lot of very smart people are insiders at Demand.

Insiders own tens of million of shares.

All public record.

Just the Directors and Executive Officers which number 16 people own as a group almost 58 Million shares

Now the stock has a 90 day trading average of only 363,000 shares a day.

You do the math.

Its easy to say that insiders are going to dump the stock, but to whom.

The stock just doesn’t trade enough shares to allow for mass selling by the insiders and they are smart enough to know it.

Dump 5% of the shares to the market maker for whatever you can get and 95% of what you have left is devalued by a huge factor.

So at this level of trading activity insiders are forced to wait to sell.

Just my observations.

3;30 Update make:  that was up,  now down with the rest of the market, still just over 220,000 shares traded under the 3 month floating average, NASDAQ is now down 72

Comments

  1. says

    I remember during dot com bubble the stock on the day of unlocked period would still go up, go up by a lot in many cases. But low and behold it will crash and burn. And will hear story that insiders merely pulling out some of their holding to diversify. No need to be alarm. Give me a break. Use common sense trust your guts. When insider cashing out it is always BAD doesn’t matter what the reasons are.

  2. MHB says

    Page

    Still the volume is too light for the amount of restricted shares.

    You need 200 days of activity just for the directors share to be bought up assuming no other non-insider shareholder sold.

  3. Gazzip says

    Sustainability is not a word that anyone is interested in anymore.

    Tech Bubble2.0
    Grow Fast Die Richer ™

    If Goldman Sachs did Domain Valuations they’d be pricing .co’s for tens of millions $$$$$$$$ ;)

  4. Snoopy says

    The current environment could really hammer a stock like this, you got a loss making business that has had its growth engine cut out. If the market continues to fall I’d expect this stock to fall a lot further than the rest of the market. It the kind of stock that people will run a mile from in a downturn. Could well get to $5 or under in the next few weeks in my view.

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