IPO
As of second quarter 2010, Financial Times reported that Demand Media was planning on an initial public offering which would mean any acquisitions would be out of the question. IPO filing was completed in August 2010. Shares were initially expected to be offered in December 2010, in an offer that would give Demand Media a value of approximately $1.5 billion. However, due to a Securities and Exchange Commission investigation regarding the company's novel accounting for "long-lived content," the IPO pricing was delayed until January, 2011. On January 12, 2011, the company announced it would price its IPO between $14 and $16 per share giving it a valuation of approximately $1.3 billion. Some blogs have questioned Demand Media's claim to be profitable, given that its IPO filings show that has reported losses for the past several years. Additionally, several news sources claim that the company's accounting practices have recently been the subject of government examination.
Post-IPO the stock rose to the mid-20s, but by fall 2011 had plateaued under $7.00.
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