Shares of social media's least loved stock Snap Inc. (NYSE:SNAP) fell as much as 5.1% in trading Thursday on a couple of ominous announcements. The company's vice president of product is leaving the company and competitor Twitter (NYSE:TWTR) is reportedly working on a video app to compete with Snapchat. Shares didn't show any sign of life late in the day with shares at a low for the day at 3:50 p.m. EST.
VP of Product Tom Conrad is not only leaving Snap, he's leaving the tech industry to focus on "music, food, photography, and things closer to art." Conrad has been in charge of a recent redesign of the site intended to increase engagement, so his loss is being seen as a sign that even the core engineer behind the design isn't bullish on the product.
Bloomberg is reporting that Twitter is looking to build a video product that allows for Snapchat-like video sharing. This product is still in development without a release timeline, but with everyone from Twitter to Facebook (NASDAQ:FB) coming after Snapchat's core business, it's hard to see a bright future for the company.
Snap has faced a number of challenges in its short life, but this may be the biggest. Reviews of the redesign are negative, advertisers aren't engaged in the Snapchat platform, and users seem to be fleeing for Instagram and now potentially Twitter's video functionality.
One day's move doesn't make or break an investment thesis, but with bad news mounting, it's hard to see Snap clawing its way out of its current challenges. And the more bad news that comes out, the worse it is for the stock.