From a financial standpoint, investors may think banning Trump could hurt Twitter, as some former followers of his feed may decide to leave the platform over their belief that the company is silencing conservative voices. There’s also the fact that even before Trump’s ban, advertisers have decided they don’t want to sponsor content on a platform that has become polarizing.
Twitter shares fell close to 10% early Monday, before making up for some losses and falling 6% by noon.
Additionally, Twitter and other social media companies may also come under more pressure from the Biden government and Democrats who will soon be controlling the House and Senate. They can try to further tackle the more inflammatory content on the platform, not to mention the outright lies tweeted by politicians and other verified account holders.
But even after Monday’s big drop, Twitter’s stock is still up about 45% over the past 12 months. That’s a greater return than Facebook’s(FB) 20% profit in the same period – although it falls short of the over 200% increase for the Snapchat owner Snap(SNAP).
Twitter reported a healthy rise in revenue for 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 commentary.
“I think we have the opportunity to show people a much broader aspect of Twitter than just what they see with news and politics,” Twitter CEO Jack Dorsey said on a conference call with analysts in October.
“People come for one reason and stay because they find relevant topics that are of interest to them,” added Dorsey.
Many Twitter users have drawn massive followers, and their tweets aren’t just newsworthy. They can also move markets.
Example: Tesla(TSLA) CEO Elon Musk, who has nearly 42 million followers, inadvertently helped spark a major rally in a small stock last week when he just tweeted “Use Signal”, an endorsement of the encrypted messaging service.
Shares of a health technology company called Signal advance(SIGL), that is not the owner of the Signal app, rose more than 525% Thursday after Musk’s tweet. On Friday, it nearly doubled again and was up another 400% on Monday after a strategist at Deutsche Bank noted the rise in a report.
