Oops! Groupon’s stocks just plummeted by more than 25 percent after the global e-commerce company named its new CEO following the departure of co-founder Eric Lefkofksy from the position.
Apparently, Groupon chief operating officer Rich Williams has a big challenge ahead after he took the CEO position from Lefkofsky and it is the decreased value of the company's stocks from $4.03 to $3 after the final trading hours.
On Tuesday, Williams, who has been the COO of the daily deals site since June, was announced as the replacement of Lefkofsky. Williams was voted by the board to be the person fit to handle the paramount role in the company, according to Forbes.
The news may not have received good feedback from the stock market as Groupon's stocks took a dip after trading halted for the news. But it's not this change in the company that greatly affected its stocks. Groupon has been battling fundamental challenges as well as steadily falling stocks recently.
The new CEO has already announced his top priority. "Under Eric, we made significant strides in establishing our marketplace. As CEO, my top priority is to unlock the long-term growth potential in the business by demonstrating everything the new Groupon has to offer," Williams said in a statement.
Williams replaced Lefkofksy who has been the CEO of the Chicago-based company since 2013. Around that time, he snagged the position after co-founder Andrew Mason stepped down from it. Mason was reportedly fired from the position by the board earlier that year.
During the earnings call on Tuesday, Lefkofsky said, "Now is the right time for me to step away form my operating role and let Rich lead us during this next stage," as quoted by the Chicago Tribune.
Lefkofksy is now returning to his chairman of the board role after Ted Leonsis stepped down but will remain as part of the board. Leonsis is also going to serve as the lead independent director.
These changes have been very difficult to the company who has seen its stock fall by more than 50 percent since the year began.
Groupon has lost $27.6 million during the third quarter - way bigger than its net loss of $21.2 million in the previous year's same quarter.
The lower-than-expected revenue is seen as the aftermath of its lackluster sales in North America. Its international business is also suffering, so forecasts for Groupon's fourth quarter revenue are way below than the estimates of analysts.
In September, Groupon announced that following its exit from Greece and Turkey, it would cut jobs and end operations in seven countries, CNBC has learned.
Despite all these, Leonsis is very optimistic that with the current role switches Groupon will conquer the challenges it is facing right now.
"We are fully confident we have identified the best leader for our employees, customers, partners and shareholders. Over the last two years, Eric has worked tirelessly for the company and the business is much stronger today because of it," Leonsis said.
