What happened
Shares of Jumia Technologies (JMIA 5.58%) fell 14% on Monday after the African online marketplace announced the departure of its co-chief executive officers.
So what
Jumia said co-CEOs Jeremy Hodara and Sacha Poignonnec were stepping down today. The company appointed Francis Dufay as acting CEO as it conducts a search for a permanent replacement.
Dufay has served in several senior leadership positions since joining Jumia in 2014. He led the e-commerce platform's Ivory Coast marketplace and, most recently, its operations across all of Africa.
Chief financial officer Antoine Maillet-Mezeray will also be joining Jumia's management board. He will be taking on an expanded role as executive vice president of finance and operations.
Board chairman Jonathan Klein said Jumia would accelerate its efforts to cut costs as it seeks to rein in its operating losses. "As we look ahead to the next chapter of Jumia's journey, we want to bring more focus to the core e-commerce business as part of a more simplified and efficient organization with stronger fundamentals and a clearer path to profitability," Klein said.
Now what
These abrupt leadership changes don't bode well for Jumia's upcoming third-quarter results. The company is slated to release its financial report on Nov. 17.
Jumia's stock price rebounded after its second-quarter earnings release before giving up those gains in recent weeks. Investors were encouraged by the online retail platform's growth metrics, which included a 25% increase in active consumers, a 35% rise in orders, and a 42% jump in revenue. Shareholders were also pleased by Hodara's and Poignonnec's assertions that Jumia's losses had peaked.
However, the company's leadership shakeup suggests Jumia's progress toward achieving profitability is not happening as fast as its board would like.
