Categories Consumer, Technology, U.S. Markets News

Snap’s stock plunges 11% after news of CFO’s exit

Snap Inc. (SNAP) saw its shares topple 11.7% in morning trade on Wednesday after the company disclosed that its CFO Tim Stone was leaving after less than a year in the position. Snap disclosed the information in a securities filing on Tuesday.

Snap said Stone’s departure is not due to any disagreement over the company’s policies or practices and although Stone’s last day has not been confirmed, he will stay on until a successor is appointed. Stone joined Snap from Amazon.com Inc. (AMZN) last May.

Stone is also reported to be leaving behind a major portion of his $20 million bonus. Analysts have raised concerns over Stone’s sudden exit, Snap’s future business plans and its ability to retain members of its management team.

Tim Stone is the latest in a long line of executives that have left Snap in recent times. The list includes Chief Strategy Officer Imran Khan, VP of Communications Mary Ritti, Head of HR Jason Halpert, VP of Content Nick Bell and previous CFO Andrew Vollero.

In the filing, Snap also said it expects to report revenue and adjusted EBITDA results that are slightly favorable to the top end of its guidance ranges. During its third quarter 2018 results announcement, the company guided for revenue in the range of $355 million to $380 million and adjusted losses of between $100 million and $75 million.

Snap Q3 loss narrows on higher revenue; stock falls on user slump

Snap is set to report its fourth quarter 2018 results on February 5. In the third quarter, revenues rose 43% to $298 million, beating estimates while adjusted loss per share narrowed to $0.12 from $0.14 in the prior-year period.

During the first three quarters of 2018, Snap has seen a sequential drop in daily active users, which is a key metric for the company, but on a year-over-year basis, the numbers have increased. Snap continues to face tough competition from Facebook’s (FB) Instagram division.

Over the past three months, Snap’s shares have dropped 22% while over the past one month, the stock has fallen 2%.

 

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