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Cramer: Departure Of Instagram Founders A 'Push Come To Shove Moment'

Cramer: Departure Of Instagram Founders A 'Push Come To Shove Moment'

Instagram co-founders Kevin Systrom and Mike Krieger confirmed Monday they are quitting their post under the parent company Facebook, Inc. (NASDAQ: FB). It's a "push come to shove moment," according to CNBC's Jim Cramer.

What Happened

Systrom and Krieger represented "much more of a free spirit," and this was evident in the Instagram app, which wasn't designed to sell personal information or monetize each user, Cramer said Tuesday. Rather, Instagram was about "telling stories," and the co-founders' departure suggests a "clash of culture" with the platform's parent company, which is focused on boosting revenue, the CNBC host said. 

Why It's Important

Systrom ran Instagram by putting customers first and monetization opportunities second if they presented themselves, Cramer said. Facebook is now viewed more as a company with the following philosophy, he said: "make a lot of money and thank you for the free content."

Systrom and Krieger, rather than COO Sheryl Sandberg, were considered by some to be the "heart and soul" of the company, Cramer said. Their departure implies the remaining executives are only focused on how often a user logs onto the platform and how to sell to them, he said. 

"That is not the way a lot of companies view business should be done, including [Apple Inc. (NASDAQ: AAPL) CEO] Tim Cook, who isn't about trying to sell [information about] what apps you download. If you download the MLB app, [Cook] isn't trying to tell MLB, 'here's your guy, sell him hot dogs.' That's not the way it's done."

What's Next

Facebook shares were down 0.20 percent at $165.08 at the time of publication Tuesday. 

Related Links:

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BTIG Raises Facebook Price Target By More Than 50%, Says Instagram Becoming 'Most Powerful, Valuable Mall In The World'


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