Bleeding senior executives at Snap

The exodus continues at the head of Snap. On Tuesday, January 15, the parent company of Snapchat announced that Tim Stone, the chief financial officer, is leaving the company only eight months after taking office. His name has been added to a long list: some twenty senior executives have left the US company since the IPO in March 2017. What can feed questions about its governance, even if its growth is stagnant.

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On Wall Street, this announcement has been heavily penalized by investors. On Wednesday, the messaging application fell by almost 15%. "This is a worrying sign, says Brent Thill, an analyst at broker Jefferies. Two CFO & # 39; s left in less than a year [M. Stone et son prédécesseur]and no significant progress has been made in financial terms. " In the first nine months of 2018, the company lost more than $ 1 billion (879 million euros).

Previously from Amazon, Mr. Stone recruited in May 2018. His arrival was well received by Wall Street, irritated by the nonchalance shown by Evan Spiegel, the founder and CEO of Snap. The CFO focused on better communication with the markets, for example by sharing profit forecasts for the first time. "He focused more on profitability"adds Doug Anmuth from the JPMorgan bank.

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Deterioration of relationships

In a document to the American Securities & Exchange Commission, the Santa Monica Group (California) claims that the dismissal of Stone was not caused by disagreements with management about accounting or management. According to the Bloomberg agency, the manager recently asked the board of directors for a substantial increase in his remuneration, without informing Spiegel of this.

In fact, the relationships between the two men would have deteriorated rapidly. At the end of October 2018, Mr. Stone did not want to publicly confirm the profitability forecast for 2019, made three weeks earlier by Mr. Spiegel. The CFO also hoped for a promotion after the resignation of Imran Khan, the number two of the company. But his boss had finally opted for the recruitment of two new leaders.

The wave of departures at Snap started just after the IPO, allowing former executives to resell the shares they owned. And it has accelerated since the autumn of 2018. In addition to Mr. Khan, the content director, the director of human resources, the director of communication and the director of marketing have given up their positions. In addition, three managers passed the hardware division last year.

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Stock dive

This bleeding emphasizes the management of Mr. Spiegel, ubiquitous boss who is known to control everything. But it can also be explained by the stock market introduction of Snap: since February 2018 the campaign has collapsed by 70%. "Many employees were attracted by the promise of high wages [dont une grande partie est versée en actions] thanks to a much higher share price than today "notes Brian Wieser from Pivotal Research.

Between start in series and action at the lowest, "It is becoming increasingly difficult for Snap to recruit and retain top leaders"Anmuth adds. The period is crucial. Victim of competitors of Instagram, who copied the popular format "stories" (photos & videos & # 39; s that disappear after 24 hours), the platform no longer attracts new followers. Snapchat also pays a much criticized revision of its mobile app. Launched in January 2018, it was partially abandoned only five months later.

At the same time, the increase in turnover shows signs of delays. And the diversification of the company promised in 2016 by Mr. Spiegel still has not come true. On Tuesday, the company tried to reassure the markets: it said that the fourth quarter results, which will be released on February 5, are at the top of their list. but "The outlook for 2019 remains uncertain", responds Mr. Thill.

Jérôme Marin (San Francisco, correspondence)

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