• Home
  • About Us
  • Contact
  • Advertise
  • Awards
  • Privacy Policy
  • Twitter
  • Facebook
  • RSS
TheDomains.com

Demand Media Turns Down $1.2 Billion To Go Private

April 28, 2012 by Michael Berkens

Allthingsd.com is reporting that Demand Media, Inc. (DMD) turned down $1.2 Billion dollars in a deal that would have taken the company private this past week.

The current market cap of Demand Media is $620 Million at the closing share price on Friday of around $7.25 a share.  Demand is off 65% of its market cap when it went public at $17 a share.

“According to the report,  “Demand Media was deep into discussions with a private equity firm to complete a deal that would have taken the online content company private for almost double its current value.”

“But Demand abandoned the effort this past week… due to a number of challenges, including complications related to its financing and the ability to retain executives in its aftermath.”

Demand Media is one of the largest company’s in the domain name space and of course owns Enom.com the world’s second largest domain registrar.

Its a interesting story and you should check it out here.

 

Filed Under: Domain Industry, Publicly Traded Domain Co

About Michael Berkens

Michael Berkens, Esq. is the founder and Editor-in-Chief of TheDomains.com. Michael is also the co-founder of Worldwide Media Inc. which sold around 70K domain to Godaddy.com in December 2015 and now owns around 8K domain names . Michael was also one of the 5 Judges selected for the the Verisign 30th Anniversary .Com contest.

« George Kirikos of Leap.com, Gets Hit With A UDRP On A 4 Letter Domain: Pupa.com
Blog.com With 8.5 Million Visitors a Month Hits The Sales Block »

Comments

  1. BrianWick says

    April 28, 2012 at 5:56 pm

    Now – is this the registrar company that shoots elephants – or the one that shoots themselves in the foot.
    If it is the later – then I am all about going private 🙂

    I just get so confused !!!

  2. rob sequin says

    April 28, 2012 at 7:04 pm

    Enom is not GoDaddy and that is not a good thing.

    Forget about domains under management, is enom gaining customers or losing customers?

    Maybe investors want to buy the next best thing to Godaddy but I think the #2 registrar is FAR down from GoDaddy.

    For example, what company is #2 to ebay? What company is #2 to Amazon? What company is #2 to Facebook?

    Right. Tough to answer.

    So, enom might be #2 to GoDaddy but that doesn’t mean they deserve a valuation anywhere near GoDaddy.

  3. Michael H. Berkens says

    April 28, 2012 at 7:27 pm

    Rob

    Interesting point also lets not forget that around 25% of all Enom 11M domains under management are from NameCheap.com which is approaching 3M names itself.

    Of course Demand owns a lot more than enom.

  4. Sean Sullivan says

    April 28, 2012 at 8:01 pm

    If I were going to offer $1.2B to take an under valued company private it would not be Demand Media, I can think of a much better one.

  5. BrianWick says

    April 28, 2012 at 8:06 pm

    Its a vast right wing & left wing conspiracy. A Publicly held corporation – I do not invest in that stuff – too much counter productive regulation – just not worth it – especially as board and executive members – maybe in a round about way Rupert Murdock wants to take in private again ?

    Which brings me to Marchex – a fire sale in the making – save your money.

  6. PUMP! says

    April 28, 2012 at 8:09 pm

    Sure hope they’re telling the truth about that ‘unknown private equity firm’. One of the standard tactics to fraudulently inflate stock prices is to hint at takeover potential. There are people sitting in Federal Prison, right now, who are there because they lied about precisely this sort of thing.

    Until names are named (as far as the capital group in question who was serious about writing a ten figure check) reports like this should be taken as less than a grain of salt.

  7. LM says

    April 28, 2012 at 8:20 pm

    Which brings me to Marchex – a fire sale in the making – save your money.
    ——

    Most receivership’s will accept asset tender offers in advance of liquidation, but you have to come to the table with enough money to make a difference. Pretty damn unlikely there’d be any nickel and dime shit (cherrypicking individual names) although a publicly traded domain company going tits up would make for establishing some interesting precedence, as far as how domain names are valued in the eyes of a court.

    Probably result in a receivers auction where big bundles of worthless “traffic domain” nonsensical shit are indiscriminately packaged with their desirable keyword stuff.

  8. Da Man Media says

    April 28, 2012 at 9:20 pm

    DemandMedia’s shares overall perfomance as a publicly traded stock has largely been a total flop …. particularly in light of the fact that the share price has stayed below 50% of it’s IPO price even during most of the US stock market’s notable rebound & rise this year.

    Separate from buyout offers/rumors at premium prices or media hype ……What do ya’ll think could/ would (if anything) enable DM to have clear & solid enough financial finacial perfomance and earnings to warrant the stock to trade above it’s IPO price and really “deserve” or have clear merit to be trading in that range ???

  9. BullS says

    April 28, 2012 at 10:08 pm

    Thanks to Obama’s Jobs Act, you all can now invest in “BullS” corporation.

    Watch out for the IPO.

  10. 3D is my life says

    April 28, 2012 at 11:58 pm

    Hearing rumors ICANN may make a bid for BullS corporation.

  11. Goran Duskic says

    April 29, 2012 at 12:54 am

    I agree with most of the comments. I just wanted to add that I think it’s great for the industry to write about speculations like this. Seriously, what really just happened? Dmnd just got some attention, and that’s all! We may never know if the offer for legitimate (I am about to read the full article, so please forgive me if I missed something, no pun intended :D).

    But I think it’s great to get people to start talking about the industry, tell them big numbers, etc. there are some interesting times ahead of us 🙂

  12. Goran Duskic says

    April 29, 2012 at 12:57 am

    I didn’t even begin to start the read the full article and I see it’s a “inside story”! Please…. Like I said, Dmnd just wanted and got some attention. Richard Rosenblatt is a smaaaart man.

  13. Dave says

    April 29, 2012 at 1:40 am

    Richard Rosenblatt is a smaaaart man.
    —-

    They’re either telling the truth, or they aren’t.
    If they are telling the truth- if there really was a private equity firm willing to write a ten figure check for Demand Media but they passed- then that’s surprising, even shocking, but very interesting.

    If they aren’t telling the truth and this is yet another example of a marginal company floating a fraudulent ‘buyout rumor’ to inspire faith (or drive up the price) of its shares, then they just committed a major financial crime for which there are people in Federal Prison, right now, for doing exactly the same thing.

    Wouldn’t surprise me to see the SEC take an interest in this. If they are telling th truth, then there’s nothing to worry about.

  14. Patricia Kaehler says

    April 29, 2012 at 2:37 am

    Alot of reading to do…
    Is it worth it ??
    ~Patricia (Busy Season)

  15. Nick says

    April 29, 2012 at 3:55 am

    @ Dave

    I think you should read the article before making any speculative observations.

    Quote :

    But Demand abandoned the effort this past week — which was born from an aggressive attempt by Boston-based Thomas H. Lee Partners to purchase the company for a price of up to $1.2 billion. That was due to a number of challenges, including complications related to its financing and the ability to retain executives in its aftermath.

  16. Dave says

    April 29, 2012 at 4:28 am

    @ Nick.

    I did read the article. I’m also someone who’s seen ‘certain things’ in the world of business before and as such, recognize ‘certain things’ when I see them again.

    Whenever a marginal company reports buyout offers that ‘just didn’t quite make it’, that’s a flag. Getting a complicit capital partner to affirm that they were ‘strongly looking at the company’ is enough to generate excitement (which translates into stock price). This sort of manipulation has been going on for a long time before you or I existed and will continue after we’re gone.

    Whether or not it’s the case with DMD, I have no idea, but I have my own personal opinions which I will keep to myself.

  17. Nick says

    April 29, 2012 at 5:37 am

    I wouldn’t call Demand a marginal company.

  18. FX says

    April 29, 2012 at 5:52 am

    Wallstreet is having a hard time valuing the company.
    They should split off their media biz from domain biz.
    It doesnt make sense for web.com (with 700m in debt ) to be worth more than Demand.
    Demand has no debt and 86m in cash.

    On the flip side while Demand’s media biz is doing great, their domain biz is not doing as well as Web.com on per user basis.

    Web.com IMO is running a real biz, Demand is just managing a major cashcow

    If I was PE i would merge both companies, realize the synergies than float them again.

  19. Dave says

    April 29, 2012 at 7:06 am

    “I wouldn’t call Demand a marginal company.”

    The market certainly thinks so… or at least they voted that way.

  20. BullS says

    April 29, 2012 at 11:56 am

    marketing for Dummies…

    hype hype hype hype

  21. Snoopy says

    April 29, 2012 at 5:48 pm

    In my view they’ll probably get bought out in the future for a fraction of the numbers being talked about today.

  22. Attila says

    April 30, 2012 at 11:18 am

    Marchex fire sale, now that would be an interesting one…Then there would be the hopes the new owners would sell marchex owned domain(s) that is worth~originally would sell between $5~$20k range, to actually ask around THAT price and not the ridiculous $50k ~ $100k… RICCARDO!!! :-)))

  23. Hosting in bangladesh says

    July 22, 2012 at 6:02 pm

    I am agreed to Dave.


Recent Articles

  • Sedo weekly domain name sales led by PLP.com
  • Global Domain Report from InternetX and Sedo is a good read
  • A no holds barred interview with Rick Schwartz

Recent Comments

  • Ramahn on A no holds barred interview with Rick Schwartz
  • Ramahn on A no holds barred interview with Rick Schwartz
  • Winston on Global Domain Report from InternetX and Sedo is a good read
  • brian wick on Global Domain Report from InternetX and Sedo is a good read
  • Ulysses on LiteBit.com sold for $50,000 buyer lost a UDRP in 2019

Polls

How Many .Web Domains Will Be Registered 1 Year After Launch

View Results

Loading ... Loading ...
  • Polls Archive

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Categories

Archives

domain name news

Copyright ©2019 TheDomains.com — Published by Worldwide Media, Inc. — Site by Nuts and Bolts Media