Last Friday, shareholders found apparel designer Mossimo (NASDAQ:MOSS) quite fashionable, driving up its stock price 22.5% on the announcement of a strong earnings report. For its second quarter, Mossimo's revenues increased from $6.2 million to $9 million, and net income jumped from $1 million, or $0.06 per diluted share, to $2.2 million, or $0.14 per diluted share.

That wasn't the only news from the company recently, however. Yesterday, founder Mossimo Giannulli surprised investors by announcing that he has decided not take the company private. So despite impressive earnings, we learned that the man who knows the company best decided not to buy it out. This is cause for concern.

Mossimo the company really doesn't manufacture anything. It creates cool designs, which it then licenses to retailers. More importantly, the company has a huge distribution partner, Target (NYSE:TGT), as a licensee. So it should be no surprise that Mossimo runs a lean organization, with only 28 employees.

Back in April, Giannulli decided to take the company private by agreeing to buy the 35% of the company he didn't own. Then yesterday, Mossimo investors watched him change his mind. He was offering only $4 per share. Mossimo's stock price plunged 14.34% to $4.90 on the news.

What happened? We can only speculate. Perhaps it was the company's improving financials. Given the company's sometimes volatile financial history, it could find itself in a difficult position when it tries to raise capital, since doing so through debt financing (at presumably high costs) conflicts with the best interests of equity shareholders. Taking the company private would have removed that dilemma.

Whatever the case, here's the bottom line: If anyone understands this business, it should be Giannulli, who started the company himself in 1987. And if he's not willing to buy the stock at current levels, it's a good bet that potential investors won't be, either.

Fool contributor Tom Taulli does not own shares of companies mentioned in this article.