Following Jason Gardner’s announcement that he would step down as CEO, shares of payment processor Marqeta fell 24% on Thursday. The company explained that it was exercising caution in light of the difficulties facing the economy and the fintech industry.

Marqeta, which Gardner founded in 2010, was valued at over $16 billion when it made its stock market debut last year. The company’s valuation has fallen below $5 billion as a result of the wider tech market downturn, and the stock is currently trading more than 75% below its high.

We want to be very proactive and start our succession planning process by looking for the next CEO to lead Marqeta in order to maximise the next stage of growth as we diversify the business, the capabilities we offer, and the geographies we serve, Gardner said to analysts on the earnings call. As the business searches for a replacement, he declared that he will continue in his role as executive chairman and CEO.

CFO Mike Miletich Predicted Forthcoming Economic Difficulties

CFO Mike Miletich Predicted Forthcoming Economic Difficulties
Image Source: WGEM

Marqeta sells payment processing equipment that is intended to spot potential fraud and guarantee that funds are sent in the right direction. Contractors from DoorDash or Instacart use these specially designed physical cards, which have the appearance of credit and debit cards, to make point-of-sale purchases from restaurants or supermarkets.

Marqeta exceeded expectations for the second quarter as revenue increased 53% from the prior year to $187 million. However, CFO Mike Miletich foresaw impending economic difficulties. “It’s prudent to be cautious about the next few months,” he advised.

Particularly, Milotich noted that many of the clients who joined in the previous year, including cryptocurrency businesses, will ramp up their operations more slowly than initially anticipated. In addition, he explained that the fintech-specific challenges would be amplified due to their already present valuation declines and a looming increase in the amount of capital needed to be raised.

However, KeyBanc Capital Markets analysts raised their price target for the stock from $11 to $12 while also raising their annual revenue forecast.

The KeyBanc analysts wrote in a note after the late-Wednesday results announcement, “Based on our research, we believe Marqeta has established a strong market presence with customers based on platform customer experience, innovation velocity and roadmap, industry knowledge, fair and aligned contract terms, and robust commercialization capabilities.