Twitter permanently suspends Donald Trump from platform
New York (CNN Business)Shares of Twitter fell Monday after the company announced late Friday that it had permanently banned President Donald Trump from the platform.
Twitter (TWTR) joins a growing list of companies distancing themselves from Trump following the deadly attack at the Capitol last week by a mob of the president’s supporters, many of whom believe Trump’s false assertion that the election was stolen from him.
From a financial perspective, investors may believe banning Trump could hurt Twitter because some former followers of his feed may decide to leave the platform due to their belief that the company is silencing conservative voices. There’s also the fact that even before Trump’s ban, advertisers may have decided they want to avoid sponsoring content on a platform that has become polarizing.
Twitter shares fell as much as nearly 10% early Monday before paring some losses and trading down 4% by midday.
Plus, Twitter and other social media companies may also come under more pressure from the Biden administration and Democrats who will soon control the House and Senate. They may seek to crack down further on the more incendiary content on the platform, not to mention the outright lies tweeted by politicians and other verified account holders.
Even after Monday’s big drop, though, shares of Twitter are still up about 45% over the past 12 months. That’s a bigger return than Facebook’s (FB) 20% gain during the same time period — although it lags the more than 200% surge for Snapchat owner Snap (SNAP).
Twitter reported a healthy jump in earnings for the third quarter but investors are worried about a slowdown in user growth. And the platform remains the preferred method for many users to share breaking news and commentary.
“I think we have an opportunity to show people a much broader aspect of Twitter than just what they see with news and politics,” said Twitter CEO Jack Dorsey during a conference call with analysts in October.
“People are coming for one reason and staying because they find relevant topics that are interesting to them,” Dorsey added.
Many Twitter users have attracted massive followings, and their tweets are not just newsworthy. They can also move markets.
Case in point: Tesla (TSLA) CEO Elon Musk, who has nearly 42 million followers, helped to inadvertently spark a significant rally in a tiny stock last week when he simply tweeted “Use Signal,” an endorsement of the encrypted messaging service.
Shares of a health tech company named Signal Advance (SIGL), which is not the owner of the Signal app, soared more than 525% Thursday following Musk’s tweet. It nearly doubled again Friday and was up another 400% Monday after a strategist at Deutsche Bank noted the increase in a report.
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