UPDATE: Stifel Nicolaus Downgrades Demand Media Following Negative Pre-Announcement

In a report published Tuesday, Stifel Nicolaus analyst Jordan Rohan downgraded the rating on Demand Media (NYSE: DMD) from Buy to Hold, and removed the $15.00 price target.

In the report, Stifel Nicolaus noted, “We are downgrading shares of Demand Media from Buy to Hold. In concert with the acquisition of Society6, management pre-announced negatively. After a year of stable trends, traffic to Demand's content sites has been negatively impacted by algo changes at Google resulting in the loss of high margin ad revenue; estimates are being reduced. Our positive stance was predicated on a stable core business, asset value and splitting the company into two separate public companies. The investment thesis has changed and we are lowering our rating to Hold.”

Demand Media closed on Monday at $8.17.