This afternoon, the shares in Snap have opened down nearly 12 percent. This comes after news broke regarding the impending departure of its chief financial officer late last Tuesday night.
The shares of the company plunged by more than eight percent in after-hours trading, before dropping even further as markets opened today to a decline of 11.8 percent.
In a filing last night, Snap said that Tim Stone is set to leave his role at Snap after less than a year in the position. It cited Stone’s wish to “pursue other opportunities.”
Stone joined Snap from Amazon last May. He is only the latest executive to leave the parent firm of Snapchat, the photo-sharing app. The company has been plagued by a series of high-profile departures since it went public almost two years ago, including the heads of its content, strategy, human resources, and sales divisions among others.
His resignation comes as the loss-making Snap is trying to recover its financial distress, despite the user numbers continuing to decline. The tech company said that it is expecting to report a loss of between $75 million and $100 million for the fourth quarter, the results of which are scheduled on the 5th of February.
Yesterday, Snap said that it is expecting revenue for the fourth quarter to be “slightly favourable to the top end” of its previous guidance, which forecasted revenues between $335 million and $380 million.
A senior analyst at Hargreaves Lansdown, Laith Khalaf, stated: “To lose one CFO looks like misfortune, to lose two in a year looks like carelessness.”
He added: “Snap hasn’t yet turned a profit and its shares are wallowing well below its flotation price, so another senior resignation isn’t a great augur for 2019.”
He continued: “Network effects can be a powerful ally of social media platforms if everyone’s on one, you need to be on it too. But it cuts both ways, and a dwindling user base can lead to a vicious downward circle.”
The share price of Snap has dropped by approximately 50 percent in the previous year and hit a record low of $4.99 per share last December- more than 70 percent below its initial listing price in March 2017.
Shorts on Snap stock have increased to more than $903 million as of today’s market open. According to data from S3 Partners, it is nearly 24 percent of its total float.