Shares of Chinese e-commerce giant JD.com (JD -0.25%) were trading more than 4% lower as of 11:30 a.m. ET Thursday after the company announced that founder Richard Liu was stepping down as CEO.
JD.com President Xu Lei will replace Liu as CEO, effective immediately, and will also join the board of directors. Liu will stay on as the chairman of the board. The transition caps the quick ascent of Lei, who was elevated to the at-that-time newly created role of company president last September, when Liu announced he was stepping back from the day-to-day aspects of running the company.
The announcement did not come as a huge surprise. Analysts anticipated a transition like this might happen after Lei was tapped as company president. At that time, Citigroup analysts said his installation in the new position showed that Lei had succeeded in growing "user acquisition and retention" in his prior role as CEO of the JD Retail unit. The analysts also said they "would not be surprised" if he eventually became CEO of the entire company.
In a statement, Liu said Lei was "highly regarded both inside and outside the company." He added: "I believe that JD has built a strong footing in the industry with sound management structure and a large number of excellent business leaders."
With this move, Liu joins several founders of large Chinese tech companies who have stepped down from leadership roles in them, though with his ownership stake, he still controls 77% of the voting rights.
One area where Liu has apparently succeeded is in maintaining a relatively good relationship with the government in Beijing. While Chinese regulators have in recent years cracked down hard on large tech companies in the country -- notably slapping JD.com's main competitor, Alibaba, with a $2.8 billion fine -- JD.com has so far avoided any huge regulatory issues.
But the billionaire's past also includes a troubling episode in 2018, when he was accused of rape in the U.S. While he was arrested in connection with that allegation, he denied it, was never formally charged, and quickly returned to China following his release from custody.
Liu's exit from the CEO role does not seem to have come as too big of a surprise to the market, and he will continue to run the company's board. His successor, Lei, also seems to be well-regarded, so it doesn't look like this transition will have too big an impact on the stock.