Demand Media Stock Crashes as Lockup Ends, and after Company Sends Cease-and-Desist to Critical Blogger

Demand Media (NYSE: DMD), which publishes sites like ehow.com and what some consider a content farm, had a rough day in the stock market now that the six-month lockup period for selling insider shares is over. 

Demand Media stock closed at $10.69, a 7.45% drop from yesterday. While today was a bad day for the market in general – the NASDAQ fell 198.75 points and the Dow fell 75.17 points – the drop is significant. The company's share price has continued to fall since April.

Stock in Demand Media has a 90-day trading average of 363,406 shares per day. Insiders in the company, such as the directors and executive officers, own almost 58 million shares. Clearly, it would be difficult for them to sell, as The Domains noted today.

The lockup end comes at a time when the company is in the midst of legal issues. Techdirt reported that Demand Media lawyers sent a cease-and-desist letter to Demand Studio Sucks, claiming that the site violated its intellectual property rights, copyright and trademark laws.  

Demand Studio Sucks is an online forum that facilitates discussions, usually critical, regarding Demand Media. Many of the contributors to DSS are content farm critics, and current and former Demand Media employees.