AMZN's Miss Makes DangDang an Easy Short

With AMZN's disappointing results now out and with a reversal in the surge of RENN and other China Internet plays now under way, shorting DANG at $7 or above is an extremely attractive proposition. However, given the notable volatility in the stock, long or short positions in it are not for the faint of heart. The stock can easily move as much as 20% up or down in a day, so investors who choose to play either direction should make sure they have the nerve for it.

In any event, however you choose to play, good luck to both longs and shorts in DANG. It is unfortunate that both sides can't be winners, but hopefully both sides will make the most informed decision possible.

At the time of publication, the author held a short position in DANG, although positions may change at any time.
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Rick Pearson is a private investor focusing on U.S.-listed China small-cap stocks. Until 2005, Pearson was a director at Deutsche Bank, spending nine years in equity capital markets in New York, Hong Kong and London. Previously, he spent time working in venture capital in Beijing. Mr. Pearson graduated magna cum laude with a degree in finance from the University of Southern California and studied Mandarin for six years. He has frequently lived, worked and traveled in China since 1992.

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