Dangdang CEO Guoqing Li has reason to look worried
China Internet stocks are continuing to suffer for their previous unrealistic valuations as investors punish them in the markets, and China Ecommerce site Dangdang attempted to stanch the bleeding today by restructuring its management, including the departure of the company’s COO, Roger Huang.
In a brief statement today, Dangdang (NSYE: DANG), which has seen its stock slide by as much as 69% from its peak value at US$36.40 to close yesterday at US$11.29, stated that it was forming “a streamlined management structure with separate business units and changes in senior management.”
Mr Huang, who joined the company as COO in 2010, was said to have left for “personal reasons,” and his departure was effective immediately. No further details were provided.
Other elements of the management shake-up included the formation of business units reporting separately to Dangdang’s two co-founders, Executive Chairwoman Ms. Peggy Yu Yu and Chief Executive Officer Mr. Guoqing Li. Ms Yu will be responsible for the baby, children and maternity business unit, while Mr Li will take charge of the media, general merchandise, apparel, digital and electronics, and e-book units.
Ms. Yue Wang was also promoted to Vice President in charge of the baby, children and maternity business unit. Ms. Wang, was previously responsible for the children’s book section of the media department
Dangdang has previously been looking for ways to prop up their valuation including proposals for a buyback of stock by Executive Chairwoman Peggy Yu Yu. As of June 23rd, Dangdang, a small player in China’s e-commerce industry, was trading at 140 times its 2011 earnings per share. Thomson Reuters Starmine data shows Dangdang trades at a 200 percent premium to its peers.
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