From a financial standpoint, investors may believe that banning Trump could harm Twitter, because some former followers of his feed may decide to leave the platform because they believe the company is silencing conservative voices. There is also the fact that, even before Trump’s ban, advertisers may have decided that they want to avoid sponsoring content on a platform that has become polarized.
Twitter shares fell nearly 10% on Monday morning, before reducing some losses and falling 4% at noon.
In addition, Twitter and other social media companies may also face further pressure from the Biden government and Democrats, who will soon control the House and Senate. They may try to crack down on the platform’s most incendiary content even more, not to mention the blatant lies tweeted by politicians and other verified account holders.
Even after Monday’s big drop, however, Twitter’s shares still rose about 45% in the past 12 months. It is a greater return than From Facebook (FB) 20% gain over the same period – although delaying more than 200% increase for Snapchat owner Snap (SNAP).
Twitter reported a healthy jump in earnings in the third quarter, but investors are concerned about a slowdown in user growth. And the platform remains the preferred method for many users to share the latest news and comments.
“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 come for a reason and stay because they find relevant topics that are interesting to them,” added Dorsey.
Many Twitter users have attracted many followers, and their tweets are not just interesting. They can also move markets.
Case in point:
Tesla (TSLA) CEO Elon Musk, who has almost 42 million followers, helped to inadvertently trigger a significant spike in a tiny stock last week when he simply
tweeted “Use Signal”, an endorsement of the encrypted messaging service.
Shares in a health technology company called Signal Advance (SIGL), which is not the owner of the Signal app, rose more than 525% on Thursday after Musk’s tweet. It almost doubled again on Friday and rose another 400% on Monday after a strategist at Deutsche Bank noted the increase in a report.
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