Twitter stock took a major hit on Monday when the social media giant’s permanent ban of President Trump was reflected in markets as investors expressed concern over the long-term effects of the platform’s unprecedented censorship.
The San Franciso-based monopoly lost a staggering $5 billion in shareholder value as fallout over the Trump ban included criticism from world leaders including Germany’s Angela Merkel who denounced the move as “problematic.”
The ban has also stirred Republican members of Congress who refused to reign in the unaccountable Silicon Valley companies that have gained a stranglehold on the means of communication in the technology era.
Investor fear of a possible congressional review of the immunity enjoyed by Big Tech under Section 230 of the Communications Decency Act in the aftermath of the ban on Trump, as well as the coordinated strike to nuke alternative social media site Parler, a forum favored by many Republicans likely contributed to the plunge.
Twitter stock closed down more than 6% on Monday, in the first trading session since the social media company permanently suspended President Donald Trump’s account.
The stock had cratered as much as 12.3% in the morning.
Twitter said late Friday it made the decision to remove the president “due to the risk of further incitement of violence,” after the deadly riot at the U.S. Capitol.
The move could likely reignite legislation to revoke Section 230, the law that protects internet companies from liability for content users post, according to analyst notes. Trump has loudly voiced his disdain for Section 230, and some politicians in both parties have complained about it.
“While a Democratic administration may be less focused on significant reform of Section 230, recent events may make content legislation more likely,” BofA Securities analysts said in a note to clients. Still, the firm reiterated its buy rating on the stock.
“We would anticipate new proposed legislation in Congress on Social Media content given recent events, but note content concerns are not new and we think that new laws will provide social media companies with better guidelines and less uncertainty,” the analysts wrote.
“Can we expect more regulatory activity? It seems likely,” Bernstein analysts said in Sunday’s note.
Trump’s Twitter account had 88 million followers at the time of deletion.
CNBC’s Wall Street stock guru Jim “Mad Money” Cramer suggested that @jack and his censors could be in big trouble after nuking Trump who he described as a great salesperson for Twitter.
“I think that there are a lot of people who literally knew that the president was the most important person, and you had to keep checking him, and then you had to check people who talked about him,” Cramer said. “And you just had this endless wave, this web that the president created, and then it was like action and reaction, so I think that the surprise factor of going to Twitter, which was of course the president, is gone!”
Cramer admitted that he’s even checked his Twitter feed less now that Trump has been banned from the platform, noting that his attention has since moved to sports.
“Twitter’s got to come up with a new thesis very, very quickly because I think they always, they never talked about the power of Trump in bringing in people,” he added. “I am telling you the real Donald Trump was a great sales person for Twitter.”
While there may have been a great celebration at Twitter HQ over the deplatforming of the sitting president of the United States, that sugar buzz may be very short-lived.