Shift Technologies appoints new CEO; strategic alternatives review ‘ongoing'

Online used-vehicle retailer Shift Technologies Inc. said Friday its board of directors appointed a new CEO, effective immediately. The move comes as the board evaluates strategic alternatives for the business.

Ayman Moussa, an automotive entrepreneur with more than 20 years of industry experience, replaces Jeff Clementz, according to a news release. Moussa comes to Shift Technologies from overseeing a group of eight new- and used-vehicle dealerships in the San Francisco Bay Area as founder and CEO of Carnamic.

Shift Technologies indicated on Friday that Clementz will remain with the company as a strategic adviser to Moussa, the board and the management team through a transition period. Clementz will step down from the board "effective immediately," the news release said.

"Having founded and led profitable auto dealerships, I believe there is significant opportunity to improve unit economics and bring the company to EBITDA profitability," Moussa said in a statement. "I plan to hit the ground running and act with a sense of urgency in implementing process improvements."

Clementz was CEO of the San Francisco company for less than a year. The announcement of his appointment to the role was made in August 2022 and he took the helm on Sept. 1. Prior to that, Clementz was the company's president, a position he held since October 2021.

He oversaw Shift Technologies' December 2022 merger with CarLotz, a used-vehicle consignment firm. The company acquired CarLotz's East Coast locations as part of that merger but later chose to divest of those locations and that presence.

Shares of Shift Technologies slipped 8 percent to $1.75 in midday trading on Friday.

Shift Technologies also said its review of strategic alternatives for the business — announced alongside its first-quarter earnings on May 11 — is "ongoing" and includes evaluation of options regarding its debt. Company executives did not take analysts' questions on that call.

In a research note published last month, equity research analyst Marvin Fong of BTIG said Shift Technologies is in a "very difficult position."

"We model insufficient cash to last through the year and its floorplan facility expires in December 2023," he wrote in the note.

The firm projects Shift Technologies to have significant losses of earnings before interest, taxes, depreciation and amortization through 2025. A debt restructuring that also preserves meaningful value for the common equity "will be extremely difficult to execute," Fong said.