Days after social media giants Facebook and Twitter permanently banned incumbent US President Donald Trump from their platforms, the companies lost a combined market value of whopping $51.2 billion over two trading sessions.
In the aftermath of the US Capitol riots, Twitter and Facebook resorted to ‘political censorship’ and banned Trump for allegedly inciting mobs and making provocative remarks. The social media giants soon faced the brunt of censoring the US President.
Fearing that users might desert the platforms, investors bailed out on Facebook and Twitter and dumped their stock. As such, Facebook plunged by 4% on Monday and 2.2% on Tuesday, resulting in a dip of $47.6 billion below what it was on Friday (January 8). Facebook traded at $245.64 per share as of 4 pm on Thursday.
Meanwhile, Twitter dipped 6.4% on Monday and further fell 2.4% on Tuesday’s close, resulting in a drop in market cap by $3.5 billion. Twitter traded at $45.79 per share as of Thursday at 4 pm, compared to the closing price of $51.48 on Friday. Interestingly, analysts have not lowered the median price targets for stocks, emphasising that the drop in market value was a knee-jerk reaction and that it would improve over time.
Other tech companies such as Apple and Google have seen a marginal rise in their market cap. At the same time, Amazon’s shares went up by 1.6% after it too engaged in censoring conservative platform, Parler. Googler owned YouTube has also suspended the account of Donald Trump for a week.
On Monday, CNN reported that incumbent Donald Trump might take action against tech giants for banning him from Facebook and Twitter. However, with just 5 days from the inauguration of President-elect Joe Biden, it is unclear whether any form of retaliation will actually materialise.
Political censorship against Donald Trump
The suspension of Donald Trump by social media platforms has taken the world by storm. Leaders around the world, including German Chancellor Angela Merkel and Mexican President Andrés Manuel López Obrador, have condemned the suspension by Twitter and called it ‘problematic’.
There is a growing consensus that the actions were motivated by political bias rather than any objective criterion. Amidst such a scenario, Twitter stocks stumbled by as much as 10% on Monday. Under such circumstances, the precise justification offered by Twitter for suspending Donald Trump from the platform went largely unnoticed.
And as it turns out, the justification cited by Twitter is absolutely bizarre and even Twitter does not say that they have interpreted Trump’s tweets as incitement to violence. Twitter does not say that at all. Instead, the social media platform claims that two of Trump’s tweets are being “interpreted” to mean an endorsement of violence. That is, Donald Trump has been banned from the platform because how others, unnamed in the statement, are interpreting his tweets.