This sounds like a mini Dendreon case in the making here as that’s kind of what happened there last week with selling of stock prior to announcing lower than projected outcomes and a flat out lay off and cut back. In reading this article though it looks like the website says we are losing sponsors both in programs and perhaps advertising slow downs as companies make budget cuts.
The charges are violation of federal securities laws with issuing misleading information and of course selling off some stock. Last year in 2010 there were some active investigations into the advertising efforts of WebMD and their use of a depression screening test online at the website. BD
The suits allege that beginning with the release of its financial results for the fourth quarter of 2010 on Feb. 23, 2011, the company issued a series of financial statements that did not reflect adverse material facts about sponsorship cancellations. For instance, WebMD's press release on Feb. 23 quoted CEO Wayne Gattinella as saying, "We enter 2011 strongly positioned to benefit as biopharma and consumer products companies continue to shift their marketing spend to online channels."
In subsequent months, company insiders sold $44.7 million in WebMD stock, the suits allege.
Then on July 18, WebMD announced expectations for lower revenue for the rest of the year and possibly beyond. Factors affecting the new financial forecast include extended internal and regulatory review of biopharmaceutical sponsorship programs that are causing delays in launching the programs, unexpected delays or cancellations of new sponsorships sold in previous quarters that were scheduled to launch this year, and lower licensing revenue resulting from fewer anticipated new customers.