Gene Munster, a managing director at Piper Jaffray, agreed. Despite the concerns, his firm remains positive on the company, maintaining an "overweight" rating.
“Dangdang is well positioned to capitalize,” said Munster in a recent research note. “The company continues to pursue its strategy of investing to improve the customer experience, which we believe will lead to more repeat buying, more loyal customers, and lower marketing costs over time.”
Dangdang’s major pre-IPO shareholders included Tiger Global, DCM Capital and IDG Technology Ventures, according to Renaissance Capital. Together they held about 30 percent of Dangdang’s total shares post-IPO.
Co-founders still hold about one-third of the company, Bard said. “They are unlikely to sell any material amount near-term given that they already sold some stock on the IPO.”
Bard said the more likely scenario is that the company owners will wait to announce a structured follow-on offering, although the current stock price, below the IPO price, makes them likely to wait.