Shares of Demand Media, Inc (DMD) have hit a 52 week low, dropping over 20% in trading today.
As of publication shares of Demand Media, Inc. are trading at $6.21 down $1.96 or 24% off of yesterday’s closing price.
Yesterday after the market closed, Demand reported that is was spending $75 million in cash and $19 million in stock to acquired Society6, an e-commerce marketplace for artwork and related merchandise.
As of March 30, Demand Media, Inc only had $109.4M in cash meaning it spent some 70% of all its cash on this one acquisition.
Demand also lowered its revenue guidance for the second quarter citing “a reduction in search engine referral traffic to its owned and operated sites in May and June.”
The company said it now expects revenue excluding traffic acquisition costs to come in the range of $95.5 million and $96.5 million, compared to its previous forecast for a range of $100.5 million and $107 million.
Demand shares are still still trading higher than its all time low, $5.24 which it hit in October 2011.
and down they go.
Maybe it is better just to be a domain investor or a registry – but nothing in between.
I wonder what industry whore godaddy’s numbers are these days
Spending 70% of its cash seems like a very risky move.
Having $30M in cash on hand is not much of a buffer for a large company with bills and employees to pay, especially one with a checked past when it comes to turning a profit.
Brad