The departures of more Twitter Inc. executives have analysts worried that company is teetering on the edge of irrelevance.
Adam Messinger, the company’s chief technological officer, and John McFarland, vice president of product, announced they were stepping down from TWTR, Tuesday, adding to waves of executive turnover at the company.
Analysts say that Twitter can still launch new initiatives to turn around the company, but that the continued departures create risk for the stock and the company’s vision.
— Scott Kessler (@KesslerCFRA) December 21, 2016
“One C-Level departure is a red flag; two in a quarter is very disconcerting,” wrote Neil Doshi, an analyst at Mizuho Securities Inc.
The departures could create large investment risks, Doshi wrote, as well as damage employee morale and hurt business with marketers. He reiterated an underperform rating and $15 price target for Twitter.
Shares of Twitter fell 5% Wednesday. Shares have declined 8% in the past month, compared with the S&P 500’s gain of 3%.
These executives are only the latest to leave. Rodney Hull, an analyst with SunTrust Robinson Humphrey, noted that the departures come one month after chief operating officer Adam Bain stepped down and two weeks after Richard Alfonsi, the company’s vice president of global sales, went to Stripe.
In addition to these departures, Twitter is suffering from fourth quarter revenue guidance of mid-single digit growth, layoffs affecting 9% of the company’s employees in October and the possibility that other executives could leave, Hull wrote. He reiterated a hold rating with an $18 price target.
Hull did point out a few product initiatives that could push Twitter forward without changing the core product, including breaking news alerts, lists, a better video discovery option and suggestions of content Twitter users may like. But these, as well as other product and sales goals, could be disrupted by executive turnover, he said.
This article was originally on Marketwatch.