Instagram's Co-Founders Resign, Departures Hit Facebook Shares
Facebook Inc's shares fell more than 2 percent in early trading on Tuesday after the two founders Instagram left the social networking giant under unexplained circumstances
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Shares of Facebook Inc fell more than 2 percent in early trading on Tuesday after the two founders of photo-sharing app Instagram left the social networking giant under unexplained circumstances.
Bloomberg News reported late on Monday that the departure of Kevin Systrom and Mike Krieger was the result of tensions with Chief Executive Officer Mark Zuckerberg over the direction of Facebook’s fastest-growing revenue generator.
That fuelled investor concern over the sudden loss of the pair, which follows the departures of WhatsApp co-founders Jan Koum and Brian Acton and a reshuffling of Facebook’s executive ranks earlier this year.
Systrom wrote in a blog post on Monday that he and Krieger planned to take time off and explore “our curiosity and creativity again”.
Zuckerberg described the two as “extraordinary product leaders” and said he wished them all the best and was looking forward to seeing what they build next.
Citing unnamed sources familiar with the matter, Bloomberg said Systrom and Krieger had been frustrated by a rise in the day-to-day involvement of Zuckerberg, who has become more reliant on Instagram in planning for Facebook’s future.
Facebook stock is currently down about 6 percent this year, after six years of stellar gains.
Concerns over the fallout of the Cambridge Analytica privacy scandal and signals that a rise in costs would hurt Facebook’s margins for years, fuelled the biggest one-day wipeout in U.S. stock market history in July.
Tuesday’s dip in trading before the bell would knock around $11 billion off Facebook shares if sustained once the Nasdaq exchange opens.