Why Dangdang's Shares Dropped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Chinese e-commerce company Dangdang (NAS: DANG) were making investors say "Dang it!" today as they plummeted as much as 16% in intraday trading.
So what: If you were to make a list of red flags for a company, high up on that list is seeing the chief financial officer abruptly resign. Today, the company announced that CFO Conor Yang has called it quits.
Now what: These things do happen in the normal course of business, so not every CFO transition, or even resignation, means that investors should freak out. In Dangdang's case, Yang's resignation was described as being for "personal reasons." This really doesn't give investors much to work with -- are "personal reasons" that he wants more time to spend with his family? Or are "personal reasons" that he is fed up with the company for some reason? There probably won't be any immediate clarity on that question, so for now Dangdang investors may want to stay on their toes.
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