Facebook (Nasdaq:FB) is losing its most valuable asset. People. Key executives Katie Mitic and Ethan Beard announced they’re leaving Facebook to pursue other opportunities. This bring to three the number of high-profile management departures since the IPO. While it is only normal to have some turnover what we have here is a full-scale mutiny. Yes the stock price is disappointing and perhaps the financial rewards are not what were hoped for but when they leave by the busload it’s a problem.
Mark Zuckerberg probably cruises through the office to see who is left. Sort of taking roll call after a fire fight. You need to see who survived. While executive dissatisfaction plays into the very recent loser narrative investors need to start asking if these guys knew something before the IPO. Their profiles have not changed. Venture capitalists and head hunters all knew who they were. But today they are all bolting for the doors.
Shareholder litigation will be coming. Facebook will become the poster child for manic-depressive investing. Investors will claim mis-representation and will be wanting to depose and cross exam the mutineers. They were on the inside and know how it’s all been trending.
In the meantime the market is realizing that extreme hype is not value.
George Gutowski writes from a caveat emptor perspective.
- Facebook stock drops below US$20 as executives announce exits (business.financialpost.com)