Tech

Snap nosedives nearly 14% after its CFO unexpectedly resigns less than one year into his job

Key Points
  • Snap said in a filing Tuesday that CFO Tim Stone, who had joined in May 2018, is resigning.
  • Stone follows a host of other executive departures in the past year.
  • Snap said the resignation did not have to do with disagreements over the company's practices, financial or otherwise.
Evan Spiegel, co-founder and chief executive officer of Snap Inc., stands on the floor of the New York Stock Exchange during the company's initial public offering on Thursday, March 2, 2017.
Michael Nagle | Bloomberg | Getty Images

Snap shares plummeted 13.8 percent Wednesday following the company's announcement Tuesday that its chief financial officer is resigning after less than a year on the job.

Snap disclosed CFO Tim Stone's resignation in an SEC filing Tuesday, saying he "has confirmed that this transition is not related to any disagreement with us on any matter relating to our accounting, strategy, management, operations, policies, regulatory matters, or practices (financial or otherwise)."

The Financial Times reported Wednesday that a "personality clash" with CEO Evan Spiegel was a factor in Stone's departure. Stone reportedly hoped to succeed former Chief Strategy Officer Imran Khan and was disappointed when two external hires took over the position instead. He also had a difficult time adjusting to a smaller company than his previous employer, Amazon, according to the FT.

Snap did not immediately respond to a request for comment.

Stone, who started as CFO in May 2018, follows a host of other executives who have fled the company. In the past year, executive departures from Snap included Khan, Vice President of Communications Mary Ritti, previous finance head Andrew Vollero and Vice President of Monetization Engineering Stuart Bowers. Stone was expected to breathe new life into the company, with Wedbush Securities analyst Michael Pachter saying his hire, among other factors, showed Snap's "increased focus on shareholder value."

But instead, the stock's value has continued to decline around 50 percent in the past six months, leaving it with a market value of about $8.5 billion before trading on Wednesday. It fell to a market value of about $7.3 billion by the end of the day. Stone's $20 million worth of restricted stock units were set to vest over four years, but the declining value of his options helped motivate his departure, the FT reported. When he joined Snap from Amazon, where he had most recently served as vice president of finance, he was offered an annual salary of $500,000.

Snap said Stone plans to "pursue other opportunities" and will continue in the role through the company's full-year 2018 financial results announcement, according to the filing. His last day has not yet been decided, the company said.

Snap included one upside in Tuesday's filing, saying its quarterly results would be "slightly favorable" to the upper end of its guidance when it reports, which is scheduled for Feb. 5. Snap predicted in its Q3 outlook that it would have revenue between $355 million and $380 million for the next quarter, and adjusted losses between $100 million and $75 million, but had also warned investors that the Snapchat app would continue to lose daily active users.

Disclosure: CNBC parent NBCUniversal is an investor in Snap.

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