It might be tempting for some investors to buy a stock that has dropped about 50% since the summer. Especially in the tech sector, where the company trades at a 15x forward P/E, and comps are trading at "sky-high" valuations.
Our advice, though, is to stay away from shares in Demand Media (DMD). The company is facing far too many threats to its business model and the resignation of the co-founder & CEO this week is not helping matters.
Demand Media is known for its content creation and domain registrar. The company owns eHow.com and Cracked.com and creates content via its Demand Media Studios division. Demand also provides companies with social media tools...
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