Facebook CEO Mark Zuckerberg is said to have started working on the app, called Slingshot, after he failed to impress Snapchat creators Bobby Murphy and Evan Spiegel with last year's $3 billion takeover bid.
Slingshot will allow users to send quick video messages to one another with only a few clicks of the screen, the Financial Times reports.
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Those mentioned in the Financial Times report said while it is possible the app will be released this month, it is also a possibility Facebook will decide to scrap the "top secret" project all together.
Shares of Facebook are up 0.19% to $58.13 on Monday.
TheStreet Ratings team rates FACEBOOK INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate FACEBOOK INC (FB) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the stock itself is trading at a premium valuation."