Twitter Inc., Facebook Inc. and several other social media platforms are facing mounting backlash from users after permanently banning President Donald Trump.
Shares of Twitter Inc. sank Monday after the company deleted the president’s account on Friday. It was the company’s first permanent suspension of a head of state.
Shares fell as much as 12.3% in the first trading session, slashing almost $5 billion from the Palo Alto, California-based company’s $41 billion market capitalization. Shares fell 7.5 percent to $47.60 at 8:07 a.m. in the first premarket trading session.
Trump was one of the six most followed accounts with more than 88 million followers before his account was deleted.
Investors fear that his removal from the platform could trigger the exodus of even more Trump supporters to Parler, which is known for its lack of censorship, threatening Twitter’s user base.
Trump supporters and right-wing activists have been closing their accounts en masse as they boycott the platform and those that remain are losing followers by the thousands.
Other social media companies also traded lower after taking actions against Trump. Shares of Facebook, which extended an initial 24-hour suspension to an indefinite one, were down about 2.8%. Snap and Pinterest each traded about 1.5% lower.
Alphabet Inc. share prices also fell after Trump’s accounts were removed from its platform.
Analysts say Twitter will be more exposed to any push for regulation than its bigger rivals Facebook Inc. or Google and YouTube-owner Alphabet.
“Trump has a very high and loyal following and a lot of those eyeballs will go away if Trump is permanently restricted from posting,” Andrea Cicione, head of strategy at TS Lombard, told Reuters.
The bans have triggered widespread debate about legislation to revoke Section 230, the law that protects internet companies from liability for content users post.
A report by Wall Street Journal writers Sarah E. Needleman and Georgia Wells noted that,” The actions against Mr. Trump and Parler illustrate more starkly than ever the companies’ influence over conversation online — and the political nature of their decisions. While lauded by many, ejecting the president and some of his supporters also infuriated others who said it amounts to censorship, and the moves risked driving off some users in a way that, especially for Twitter, could reshape their businesses. It also illustrates the political nature of how they determine what content to remove, what content to allow and what to amplify.”
Apple Inc., Alphabet and Amazon.com Inc. also suspended Parler from their app stores and Web-hosting services, forcing the company offline.
“These moves, whether you consider them justified or not, could well see them lose further users if they become seen as arbiters of what is considered politically correct or acceptable,” said Michael Hewson, chief analyst at CMC Markets UK.