Following the exit of top executives of Snap Inc (NYSE:SNAP) including Tim Stone, Chief Financial Officer, the share price declined to $7 from an IPO price of $17. The stock slumped further to $4.99 as the company loses users quarterly basis. However, the stock recovered and trading at $10.30.
Snap loses Halbert and Francis
Snap lost two senior executives recently after it began a probe into an inappropriate relationship with a contractor. The company fired Francis Racioppi, Head (Global Security) in 2018 after proving that he has a relationship with an outside contractor. Jason Halbert, Head (HR), who hired Francis, has left the company.
Tim Stone, Chief Financial Officer, who served for 20 years at Amazon, left Snap just after eight months of the stint. The debacle in stock price caused a drop in his package. He requested the board to hike his package. However, it didn’t work and causing his exit.
Time to overhaul the corporate culture
It is time for the company to keep measures and restore corporate culture to maintain growth forward. Evan Spiegel, Chief Executive Officer and founder of Snap, maintained control over the company. He maintains a 48.4% of voting stock. Spiegel got $637 as post IPO bonus representing a 3% of total outstanding shares at the time of IPO. Bobby Murphy is the second biggest shareholder in the company.
The company filled the vacancies with a strong team of professionals. However, they did not maintain a strategy to move forward. Spiegel leads the complete revamp of Snapchat after visiting China. However, it has been a debacle with design issues and glitches. Another drawback of Spiegel is that he will not spare the employees, who talk against.
Michael Lynton, a separate chairman of Snap, has considerable experience and leadership to counter Spiegel. Snap is suffering under the leadership of Spiegel, who recently acknowledged wrongdoings. It is time for the company to look for the successor of the CEO.
Strong quarter for snap
Snap reported strong results in this quarter. The results show Snap would continue growth momentum. It is more popular among the young population. The company would roll out a redesigned Android App by the end of 2019 for all users.