From a financial perspective, investors may believe that banning Trump could hurt Twitter because some former followers of his feed may decide to leave the platform because of his 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 sponsor content on a platform that has been polarized.
Shares of Twitter fell to nearly 10% early Monday before matching some losses and trading 4% at noon.
In addition, Twitter and other social media companies may also be under more pressure from the Biden administration and Democrats who will soon control the House and Senate. They may try to further repress the most incendiary content on the platform, not to mention the direct lies posted by politicians and other verified account holders.
Even after Monday’s big drop, however, Twitter shares have continued to rise by about 45% in the last twelve months. It is a return greater than Facebook (FB) 20% gain over the same time period, although delayed by more than 200% rise for Snapchat owner Snap (SNAP).
Twitter reported a sharp jump in profits during the third quarter, but investors are worried about slowing user growth. And the platform remains the preferred method for many users to share breaking news and comments.
“I think we have a chance to show people a much broader aspect of Twitter than what they see with news and politics,” Jack Dorsey, CEO of Twitter, said 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,” Dorsey added.
Many Twitter users have attracted massive followers, and their tweets are not only newsworthy. They can also move markets.
Case study:
Tesla (TSLA) CEO Elon Musk, who has about 42 million followers, inadvertently helped provoke a significant concentration in a tiny stock last week when he simply went
he tweeted “Use signal,” a recommendation from the encrypted messaging service.
Shares of a health technology company called Signal advance (SIGL), which is no the owner of the Signal app, shot up more than 525% on Thursday after Musk’s tweet. It nearly doubled on Friday and rose another 400% on Monday after a Deutsche Bank strategist noticed a report increase.
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