- Twitter Inc’s decision to suspend President Donald Trump’s account will test a truce made last year between CEO Jack Dorsey and top shareholders of the social media company which allowed Dorsey to remain in the top job.
Since then, Twitter shares had risen more than 70% as of Friday - the day Twitter suspended Trump - as users flocked to the app for news in the wake of the COVID-19 pandemic. Yet its stock has dropped 9% this week amid investor concerns that banning Trump would alienate some of his 88 million followers from the popular social media platform and trigger a new push by lawmakers to regulate it.
Analysts and investors said the impact of the ban on Dorsey’s standing with investors will hinge on whether the move weighs on the company’s longer-term growth prospects, and that the chances of a regulatory crackdown on the app were difficult to assess. Many said, however, that they expected most Twitter users to remain on the platform and top shareholders to stick with the company.
The reaction of advertisers, from whom Twitter derives the bulk of its revenue, will be key. Many are drawn to the platform because of its high user “engagement,” a measure of how active and involved people are when they use the app, and are fearful of being mired in controversy, said Mark Douglas, chief executive of SteelHouse, which provides advertising software to help marketers reach audiences across TV, Web and mobile media.
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