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Facebook's Product And WhatsApp Chiefs Are Leaving, Analysts Say It's Consistent With Transition Towards Privacy

Facebook's Product And WhatsApp Chiefs Are Leaving, Analysts Say It's Consistent With Transition Towards Privacy

Facebook, Inc. (NASDAQ: FB) CEO Mark Zuckerberg said in a post to employees on Thursday the company's chief product officer Chris Cox and head of WhatsApp Chris Daniels are leaving the company.

What Happened

Cox worked closely with Zuckerberg to build products for more than a decade and played a central role at Facebook, the CEO said in his post. The departing executive has been thinking about leaving his post and "now is the time" for him to do so.

Business Insider said there is a "telling line" in Cox's resignation letter that suggests he didn't agree with Zuckerberg's decision to focus a lot more on privacy and encryption. Specifically, he said: "This will be a big project and we will need leaders who are excited to see the new direction though."

In other words, Cox is not among the leaders at Facebook who "believe in the direction of travel," according to Business Insider.

Why It's Important

JMP Securities' Ronald Josey said Cox's departure is consistent with Facebook's move to evolve towards more privacy-focused applications.

Meanwhile, Facebook is introducing some organizational realignment in which the leader for each of its core apps will report directly to Zuckerberg, the analyst wrote in a note. This move signals a focus on "building a more intimate, 1:1 privacy-focused social platform."

It also suggests Zuckerberg will be taking an even bigger role in product involvement.

What's Next

Facebook continues to face risks around its changing product strategy and organizational changes, said Rosey, but user engagement continues to be strong and the company is also showing improving monetization activity across Video, Stories and Messaging. As such, investors should consider buying Facebook's stock on any dip moving forward.

Tigress Financial Partners' Ivan Feinseth also said investors should be buyers of the dip. In his daily newsletter, the analyst said the company's long-term growth drivers will "overcome" any near-term headwinds, including executive departures.

"Facebook continues to be a leading innovator and will continue to benefit from increases in digital advertising spending," Feinseth wrote.

Facebook's stock was down 1.46 percent at $167.69 in early Friday trading.

Related Links:

Report: Facebook Under Criminal Investigation

Nomura Instinet Upgrades Facebook, Says More Regulation Will Be 'Net Positive'

Latest Ratings for FB

Mar 2019Bank of AmericaReiteratesBuyBuy
Mar 2019NeedhamDowngradesBuyHold
Mar 2019NomuraUpgradesNeutralBuy

View More Analyst Ratings for FB
View the Latest Analyst Ratings

Posted-In: Chris Cox Chris Daniels Ivan FeinsethAnalyst Color News Management Top Stories Analyst Ratings Best of Benzinga


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