Why Dangdang's Shares Got Crushed

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What: Shares of Chinese e-commerce specialist E-Commerce China Dangdang (NYS: DANG) were making investors want to throw a third "dang" on the end of that name, as the shares fell as much as 19% in intraday trading after the company reported first-quarter results.

So what: It's been a tough couple of months for Dangdang. The last time I peeked in on the company, shares were getting battered after the company's CFO decided to abruptly call it quits. This time around, the losses were driven by what investors found in the company's quarterly earnings roundup.


On an absolute basis, the 58% year-over-year revenue growth looked pretty darn good. Unfortunately, the $172 million tally for the quarter didn't quite stack up to the $176 million that Wall Street was looking for. On the bottom line, investors were expecting a loss, but the company's loss per share of $0.20 was actually better than the $0.24 loss that analysts had predicted.

Now what: While the results for the current quarter may not sound so bad, what probably has investors really fired up today is management's outlook for the upcoming quarter. The company sees its revenue growth rate slowing in the next quarter to 50%, for a quarterly finish at roughly $188 million. The 10 Wall Street analysts covering the company had been projecting $202 million for the quarter.

So, when all was said and done with Dangdang's quarter, it appears that slower-than-expected growth is one more concern that investors need to heap on the pile here.

Want to keep up to date on E-Commerce China Dangdang?Add it to your Watchlist.

At the time this article was published Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.  Fool contributorMatt Koppenhefferdoes has no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.

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