Enom 2012 Annual Report Download - page 37

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Risks Relating to Owning Our Common Stock
An active, liquid and orderly market for our common stock may not be sustained, and the trading price of our common stock
is likely to be volatile.
An active trading market for our common stock may not be sustained, which could depress the market price of our
common stock. The trading price of our common stock has been, and is likely to be highly volatile and could be subject to wide
fluctuations in response to various factors, some of which are beyond our control. For example, since shares of our common
stock were sold in our initial public offering in January 2011 at a price of $17.00 per share, our closing stock price has ranged
from $5.62 to $24.57 through February 27, 2013. In addition to the factors discussed in this “Risk Factors” section and
elsewhere in this Annual Report on Form 10-K, these factors include:
• our operating performance and the operating performance of similar companies;
• the overall performance of the equity markets;
• the number of shares of our common stock publicly owned and available for trading;
• threatened or actual litigation;
• changes in laws or regulations relating to our solutions;
• changes in methodologies or algorithms used by search engines and their impact on search referral traffic;
• any major change in our board of directors or management;
• publication of research reports about us or our industry or changes in recommendations or withdrawal of research
coverage by securities analysts;
• publication of third-party reports that inaccurately assess the performance of our business or certain operating metrics
such as search referral traffic, the ranking of our content in search engine results or page view trends;
• large volumes of sales of our shares of common stock by existing stockholders; and
• general political and economic conditions.
In addition, the stock market in general, and the market for Internet-related companies in particular, has experienced
extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those
companies. Securities class action litigation has often been instituted against companies following periods of volatility in the
overall market and in the market price of a company's securities. This litigation, if instituted against us, could result in very
substantial costs, divert our management's attention and resources and harm our business, operating results and financial
condition. In addition, the recent distress in the financial markets has also resulted in extreme volatility in security prices.
The large number of shares eligible for public sale or subject to rights requiring us to register them for public sale could
depress the market price of our common stock.
The market price of our common stock could decline as a result of sales of a large number of shares of our common stock
in the market, and the perception that these sales could occur may also depress the market price of our common stock. As of
February 27, 2013, we had 86,764,090 shares of common stock outstanding.
Certain stockholders owning a majority of our outstanding shares are party to a stockholders agreement that entitles them
to require us to register shares of our common stock owned by them for public sale in the United States, subject to the
restrictions of Rule 144. In addition, certain stockholders, including investors in our preferred stock that converted into
common stock as well as current and former employees, are eligible to resell shares of common stock under Rule 144 and Rule
701 without registering such stock with the SEC.
In addition, as of December 31, 2012 we have registered approximately 44 million shares reserved for future issuance
under our equity compensation plans and agreements. Subject to the satisfaction of applicable exercise periods, vesting
requirements and, in certain cases, performance conditions, the shares of common stock issued upon exercise of outstanding