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E-Commerce China Dangdang Inc. Message Board

  • afewminutes21 afewminutes21 Aug 7, 2013 1:54 PM Flag

    Traffic. Revenue. Profit?

    I'm long DANG, though my confidence is often shaky. I like the fact that DANG is building warehouses and a distribution network and has developed what is apparently the dominant e-reader in China - all this makes me think DANG is trying to establish itself as a long-term independent e-commerce player rather than simply becoming another acquisition target for Alibaba (or even 360 Buy if they ever manage to IPO). I also like that DANG seems to be vigilant and adaptable - they've seen the profitability in flash sales, having a mobile-friendly sales platform, and establishing partnerships with merchants to sell through their site, and they've wasted no time incorporating all of those elements into their business. I don't think there's any doubt that the next earnings report will show gains in customer volume and revenue, since they've accomplished that pretty consistently since their IPO. I think most will agree that what will finally propel DANG's share price to VIPS style multiplication is if they reach profitability. Some people laughed when DANG said that they could be profitable right away if they quit spending to build their infrastructure, but that's probably true. Still, most investors only see short term and if DANG continues to operate in the red, I'm pretty sure we won't see double digits after the August report. In terms of value, however, can anyone argue that VIPS or any of the other smaller e-commerce players have anywhere near the potential of DANG? My fear continues to be that when Alibaba experiences windfall IPO cash they may decide to undersell everyone else in the industry until they are the only ones who haven't gone bankrupt and then they'll be the only e-commerce game in town. I have no idea if DANG has enough customer loyalty and reserve cash to sustain an apocalypse like that. What do you think? No need to waste time using words like #$%$", "shyt", "tampons" or any racist terms for Asians in your responses, thanks.

    Sentiment: Strong Buy

6.63+0.01(+0.15%)Sep 20 4:02 PMEDT