Marqeta shares plunge more than 20% on CEO exit and ‘cautious’ expectations for coming months

Marqeta celebrates IPO on the Nasdaq on June ninth, 2021.
Supply: The Nasdaq

Shares of fee processor Marqeta closed down 24% on Thursday after founder Jason Gardner introduced plans to step down as CEO, and the corporate mentioned it is being cautious given the challenges within the financial system and fintech sector.

Gardner began Marqeta in 2010 and grew it into an organization that was value over $16 billion after its stock market debut final yr. Nevertheless, the inventory is greater than 75% off its excessive, and the broader tech market swoon has pushed the corporate’s valuation under $5 billion.

“To maximise the following stage of progress, as we diversify the enterprise and the capabilities we provide and the geographies we serve, we wish to be very proactive and start our succession planning course of by on the lookout for the following CEO to guide Marqeta,” Gardner instructed analysts on the earnings name. He mentioned he is staying on as government chairman and can stay CEO as the corporate seems for a successor.

Marqeta sells fee expertise that is designed to detect potential fraud and make sure that cash is correctly routed. The corporate points custom-made bodily playing cards that appear to be credit score and debit playing cards, which contractors from DoorDash or Instacart use to make point-of-sale purchases from eating places or supermarkets.

For the second quarter, Marqeta beat estimates as income jumped 53% from a yr in the past to $187 million. However CFO Mike Milotich warned of financial challenges on the horizon. He mentioned it is “prudent to be cautious in regards to the subsequent a number of months.”

Particularly, Milotich mentioned lots of the clients that signed up within the final yr, together with crypto firms, will ramp their enterprise extra slowly than beforehand anticipated. He additionally referred to as out the “fintech-specific challenges with vital declines in valuation and growing difficulties in elevating capital.”

Nonetheless, analysts at KeyBanc Capital Markets lifted their value goal to $12 from $11 and elevated their income estimate for the yr.

“Primarily based on our analysis, we imagine Marqeta has established a powerful market presence with clients based mostly on platform modularity, innovation velocity and roadmap, deep area data, honest and aligned contract phrases, and sturdy commercialization capabilities with a basic need to increase worldwide presence,” the KeyBanc analysts wrote in a observe after outcomes had been launched late Wednesday.

WATCH: Marqeta CEO on the need to diversify

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