Thunder Capital
Short only, deep value, tech, mid-cap

Demand Media - Stay Away

Demand Media (DMD) -

Brief history: Co-founded in 2006, Demand Media is a web-based content company that owns,,, and other smaller content websites. The majority of the revenue is generated from Google AdSense advertising dollars. The other half of their business is the domain services, wholesale domain registration services and ancillary hosting services.

The Company IPO'd in the Q2 2010 at $17.00 per share. To be brief, the Company was a content farm relying on Google (NASDAQ:GOOG), and it capitalized exorbitant content expenses that no other content companies capitalized. It claimed that the content expenses have 3-5 years useful life, and it had a cohort analysis that showed articles would generate more revenue after the...

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