Demand Media (NYSE: DMD), the content farm that has given the world gems of advice such as "How to Make Money in a Trailer Park" and "How to Terminate a Suicidal Employee" (wait?), hit a new low on the stock market Monday as shares dropped below $11 for the first time since the company went public in late January.
Shares fell in early trading to 10.76, or 8.8 percent below Friday's closing price of 11.80, before crawling back up to 10.98 shortly before 3 p.m.
There doesn't appear to be any catalyst for Monday's plunge. Rather, it seems to be a continuation of the long slide in share price precipitated by Google's ongoing Panda project, which aims to improve search results by altering search algorithms to weed out low-quality content from the top of user results.
In mid-April, not long after Demand shares peaked at 27.38, Google implemented a Panda update that reduced the visibility of the company's flagship ehow.com site by 66 percent (see link above) and resulted in an immediate 11 percent drop in stock price.
Another Panda update in June seems to have further eroded eHow's visibility on Google, according to SeekingAlpha contributor Tim Chen. Which is bad news for those seeking quality advice on "How to Become a Gigolo" and "How to Put on a Speedo." (Here's a fun blog called "The Worst of eHow.")
Money-losing Demand went public on Jan. 26, pricing shares at $17. The stock went as high as 25.00 in its debut before closing at 22.65. At the time I called Demand's offering "the worst IPO of the year." Six months later, I stand by that characterization.