Shares of Bukalapak fell on Thursday after Rachmat Kaimuddin resigned as CEO a few months after leading the e-commerce firm’s historic initial public offering on the Jakarta Stock Exchange.
Bukalapak said it has appointed Willix Halim, currently the company’s chief operating officer, as interim CEO following Kaimuddin’s resignation. Its shares fell as much as 4.9% in Jakarta trading today, touching an all-time low of 430 rupiah.
The company made history in August after raising $1.5 billion from its IPO, the country’s biggest-ever maiden share sale. The shares initially rallied, jumping 25% on its first trading day, but sentiment turned sour quickly as investors wondered how Bukalapak can compete against larger e-commerce players such as homegrown GoTo, which was formed from the merger of Gojek and Tokopedia in May, and Singapore-based rivals such as Grab and Sea Group’s Shopee. The shares are now down nearly 60% from its IPO price of 850 rupiah apiece.
“The CEO’s departure confirms our fears about the company’s vulnerabilities,” Nirgunan Tiruchelvam, Singapore-based head of consumer sector equity research at Tellimer, said via text messaging. “The company is at best a marginal player with an unsettled management team.”
Tiruchelvam initiated coverage of Bukalapak this month with a sell rating and target price of 413 rupiah per share. “Bukalapak is a peripheral player that will be eroded by market leaders Sea, Grab and GoTo,” he said in his initiation note. “As the fourth-largest player in Indonesia’s e-commerce market, Bukalapak has only 7% market share, and it will be restricted by its lack of scale.”
Kaimuddin is leaving Bukalapak to work for the government two years after being appointed CEO in 2019, according to the company. The former financier was tapped for the job because the company’s investors saw him as the right person to staunch the flow of red ink and put the 11-year-old firm on a path of profitability.
While the company remains in the red, Kaimuddin is credited for bringing in bluechip investors into the company. Bukalapak’s roster of investors includes Singapore’s sovereign wealth fund GIC, China’s Ant Group, U.S. tech giant Microsoft, Standard Chartered bank and South Korean web portal Naver Corporation, among others.
“We have been very positively surprised with the momentum and the level of interest from both domestic and international investors,” Alvin Sariaatmadja, president director of Emtek, the largest shareholder of Bukalapak, told Forbes Asia just before the tech unicorn listed.