Twitter cut into Donald Trump’s megaphone by permanently suspending the president’s account Friday to avoid the “risk of further incitement of violence” after pro-Trump supporters stormed the U.S. Capitol on Wednesday.
But how much was the Commander-in-Chief’s presence worth to the platform after racking up 57,000 tweets and approximately 89 million followers.
announced Trump’s permanent suspension after trading hours Friday and it fell 6% before trading started Monday morning. That blotted out approximately $2.5 billion in market value, according to Reuters.
That tallies with one analyst estimated from 2017, which said that Trump generated an estimated $2 billion for the site by bringing in users, keeping them on the site to read what he had to say — and scrolling across ads in the process.
By mid-day, shares were trimming losses, down almost 7% after bouncing off a low of approximately 11%.
For Mark Shmulik, internet analyst for AllianceBernstein, Twitter’s lower stock market opening Monday “certainly feels like a bit of overreaction.” He added, “Most advertisers won’t touch anything Trump related.”
And that was even before last week’s events, he said. On Sunday, PGA of America cut its ties with the Trump Organization, saying it wouldn’t have its 2022 PGA Championship at Trump’s Bedminster, N.J. golf course.
In Twitter’s 2020 third quarter, its revenue was $936.2 million, up from $823.7 million in the same quarter one year earlier. A Twitter spokeswoman declined to comment.
In fact, Trump’s absence might be Twitter’s longterm gain, Shmulik and other market observers said.
Without Twitter conversations constantly occupied by Trump’s tweets or reactions to his tweets, Shmulik said more advertisers might increasingly look at the site as safe for their brand, which could bump up ad prices.
“Assuming that’s the case, there’s an argument over long term, this is a net positive to the company,” he said.
Facebook on Thursday banned Trump at least until the end of his term. Facebook
shares are down roughly 3.5% in trading Monday.
The downward pressure on Twitter shares could be happening because the market could be anticipating too much of an exodus from the site, according to Shmulik.
Other market observers questioned just how many Twitter users come and go based on Trump’s presence. “We have always wondered how much of Twitter’s growth came from the ‘Trump Bump,’” MoffettNathanson analyst Michael Nathanson wrote in an investor note.
So what comes next for Twitter and other tech companies? More regulation on content and liability under President-Elect Joe Biden, and a Democratic-controlled House of Representatives and U.S. Senate?