Another ‘surprising’ Exit for Snapchat Executive as Stock Plummets to Single Digits
Snapchat’s series of unfortunate events in the stock market continues despite the company’s numerous efforts to try and diffuse the situation.
In fact, according to a regulatory filing made last week, Snapchat’s chief strategy officer, has announced plans to exit the company.
Khan, who was once an analyst with JPMorgan Chase and Credit Suisse, first joined Snapchat in 2015.
According to the SEC filing made by the company, it said that Khan will stay on for a short interim time, and his reasons for leaving Snapchat had nothing to do with any alleged qualms that he had with executives.
That being said, Khan has joined a swelling list of executives that have exited Snapchat in the past one year following the departure of Drew Vollero in May who was the Chief Financial Officer but was replaced by Tim Stone. Stone was a former executive at Amazon.
Additionally, Tom Conrad, the Vice President of Product, had announced in January this year that he was also departing.
Moreover, one of Snapchat’s leading engineering personnel, Stuart Bowers, exited Snapchat in May in favor of Tesla. A move that was seen as quite puzzling considering that Tesla is also a company that has struggled tremendously with executives within its ranks.
Indeed, Snapchat has failed to secure a long-serving chief executive officer following Emily White’s 2015 departure from the company.
That being said, the current executive crisis being witnessed at Snapchat has left executives nervous and worried.
Executive Crisis Rippling Across Shares
In fact, the crisis trickled into the share price, with Snap Inc. share value following by more than 2% on Monday last week, rendering it to trade within the single digit range.
The stock recorded its all-time low, having dwindled by more than 40% from its initial offering price of $17 last year!
In a statement regarding Khan’s filing on Monday last week, Snapchat co-founder and CEO Evan Spiegel praised Khan for being a great individual that spearheaded the building of the business, with the company wishing him the best in his future endeavors.
Moreover, Khan commented that the company was duly prepared for his departure, and that there was a dependable leadership team to steer the company in the next phase of its existence.
However, it seems like investors are not so confident about it. In fact, the company recently recorded its most massive drop in daily usage, a major sign that intense competition from Facebook’s Instagram and a controversial design in its appearance have severely impacted the company.
Another major problem affecting Snapchat is that investors have to put their total trust and assurance in co-founder Bobby Murphy, who also happens to be the company’s chief technology officer, as well as Spiegel to handle the firm’s operations.
This is due to the fact that shares from Snapchat trade on the NYSE with virtually zero voting rights, making it extremely uncomfortable for investors. In fact, this is highly unusual, considering the fact that a majority of large tech companies usually provide a founders stock which gives investors the right to vote.
Looking for a Savior
Indeed, this might be the time for Snapchat to fish for the likes of a capable CEO, in tune with what Facebook did by hiring COO Sheryl Sandberg or perhaps even former chairman of Google Eric Schmidt. An individual who is capable of harmonizing financial heads on Wall Street with tech wizards in Silicon Valley.
That being said, the exit of Khan will make it difficult to shake off the perception that Snapchat’s main two leaders, just like most of its user-base of young individuals, maybe a little too coy with their executive decisions.
A Dwindling User-Base
What’s scary about the current trend in Snapchat is that it lost more than three million users last quarter, which was the first time ever that the company had to report on a dwindling user base.
Interestingly, about 2 years ago within the same quarter, Snapchat had recorded a whopping increase of 21 million daily users, and things seemed to have been going smoothly for the company prior to their initial public offering.
Perhaps the single thing that can be attributed to Snapchat’s recent downfall is the fact that Facebook incorporated the use of stories into virtually all its platforms, making users plant their feet in both Instagram and Facebook.
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