Enom 2014 Annual Report Download - page 29

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Following the Separation, the price at which our common stock trades may fluctuate significantly while the market continues to
evaluate the two companies with different growth profiles and operating margins separately. Further, shares of our common stock will
represent an investment in a smaller public company and this change may not meet some stockholders’ investment strategies or
requirements, which could cause investors to sell their shares of our common stock. Excessive selling could cause the market price of
our common stock to decrease. Additionally, as a result of the reverse stock split reducing the number of shares of our common stock
that are outstanding, we may have a lower average daily trading volume, which could lead to greater volatility in the trading price of
our common stock.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this report, factors that may cause the trading
price of our common stock to be volatile 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;
• any major change in our board of directors or management;
• publication of research reports about us or our industries or changes in recommendations or withdrawal of research
coverage by securities analysts;
• publication of third-party reports relating to the performance of our business or certain key operating metrics;
• 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, financial condition and results of operation.
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 March 5, 2015,
we had 19,802,470 shares of common stock outstanding (excluding shares held in treasury).
Certain stockholders owning a majority of our outstanding shares of common stock 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 shares with the SEC. Sales of our common stock as restrictions end or pursuant to registration rights may make it
more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. These sales also could
cause our stock price to fall and make it more difficult for shareholders to sell shares of our common stock.
In addition, as of March 5, 2015 we have over nine million shares of common stock reserved for future issuance under our
equity compensation plans, of which approximately five million shares are registered under our registration statement on Form S-8 on
file with the SEC. Subject to the satisfaction of applicable exercise periods, vesting requirements and, in certain cases, performance
conditions, the shares of registered common stock issued upon exercise of outstanding options, vesting of future awards or pursuant to
purchases under our employee stock purchase plan (the “ESPP”) will be available for immediate resale in the United States in the
open market.
We also have previously and may from time to time in the future issue shares of our common stock as consideration for
acquisitions and investments. If any such acquisition or investment is significant, the number of shares that we may issue may in turn
be significant. We currently have an effective shelf registration statement on file with the SEC which we may use to issue debt or