Shares of D-Market Electronic Services & Trading (HEPS 3.47%) plunged on Thursday, falling as much as 26% after the company delivered disappointing earnings results and announced some high-level management changes. As of 2:16 p.m. EDT, the so-called "Amazon of Turkey" saw its stock collapse 25.4%.
The leading e-commerce provider in Turkey revealed its growth had slowed to a crawl and that it was shaking up its management team. For the second quarter, D-Market generated revenue of 1.75 billion lira (roughly $209 million), up 5% year over year. At the same time, gross merchandise volume, or GMV, of 5.9 billion lira ($704 million) climbed 38%.
To give these numbers some context, D-Market's revenue grew 145% year over year in 2020, and was up 65% in the first quarter. At the same time, GMV increased 111% in 2020, and 95% in the first quarter, so the recent results marked a significant deceleration of the company's growth.
Investors were also greeted by another unexpected development, in the form of an executive leadership shakeup. Murat Buyumez, D-Market's chief strategy and business officer, will assume the role of chief commercial officer in charge of category management and commercial operations. At the same time Mutlu Erturan, D-Market's current CCO, will become its chief business officer, heading up the company's new ventures, growth initiatives, and strategic opportunities. The role of chief strategy officer will remain vacant for now.
Wall Street dislikes uncertainty and changes to top level executives almost always raise eyebrows. Investors were already spooked as D-Market's growth came to a screeching halt less than two months after its initial public offering. That combination of factors no doubt fueled the sell-off.