As Tech Giant’s Share Price Tumbles

Twitter users are voting with their feet in response to the tech giant’s ban on U.S. President Trump’s account, which could usher in the end of the “free speech wing of the free-speech party,” according to one federal member of Parliament.

Meanwhile, one expert says Twitter’s decision was a commercial one, with the tech giant weighing up the potential backlash from different audiences.

Following the ban on Trump’s Twitter account, share prices of the tech giant dropped over 12 percent wiping US$5 billion from its market value.

Its share price has yet to recover.

“Originally, the CEO of Twitter said it was the ‘free speech wing of the free-speech party’ … well what we’re seeing in the last week is anything but,” the Member for Dawson, George Christensen told The Epoch Times.

The suspended Twitter account of U.S. President Donald Trump appears on an iPhone screen on Jan. 08, 2021. (Justin Sullivan/Getty Images)

“I think people are voting with their feet as well as investors, and that is going to spell the beginning of the end for Twitter,” he said.

“If people can’t freely express their own opinions online without fear of being censored or blocked or banned or shadowbanned. They are going to go elsewhere,” he added.

Twitter CEO Jack Dorsey took to his platform to issue a statement on Thursday saying, “I believe this was the right decision for Twitter.”

“That said, having to ban an account has real and significant ramifications. While there are clear and obvious exceptions, I feel a ban is a failure of ours ultimately to promote healthy conversation,” Dorsey said.

The ban came last week over allegations Trump violated Twitter’s “Glorification of Violence Policy.” The move came soon after civil unrest broke out at the U.S. Capitol.

Rival Twitter-app Parler momentarily saw its popularity rocket due to the ban, becoming the number one most downloaded app on the Apple Store.

Parler was later de-platformed from both Apple and Google’s online stores, while Amazon Web Services stopped hosting the app on its servers.

The combined move has rendered the app inaccessible to millions of online users.

This illustration picture shows social media application logo from Parler displayed on a smartphone with its website in the background in Arlington, Va., on July 2, 2020. (Olivier Douliery/AFP via Getty Images)

Consequently, social media app Gab has exploded in popularity, with the company racing to expand its platform to accommodate the surge of users.

“The Big Tech companies are trying to play ‘whack-a-mole’ at the moment,” Christensen remarked in response to the actions taken against Parler.

“I think they’re shooting themselves in the foot, and it would be best for everyone if they just went to the back to being free speech platforms, like they promised they were going to be at the very beginning.”

Dr Rob Nicholls, associate professor at the University of New South Wales and expert in competition law, says the decision to ban Trump was a commercial one.

“Twitter balanced the likely expectations of some users with the expectations of others. It has similarities to Rupert Murdoch’s decision to call Arizona’s election results on Fox News; and calls for Trump’s impeachment or resignation from the Wall Street Journal,” he told The Epoch Times.

“The stock market reaction to dumping Twitter shares suggests that the value of Trump to the platform may be greater than the appeal of his removal,” he said.

Social media companies such as Google, Facebook, and Twitter derive significant revenue from selling advertising. Generally, the more users a platform has, the more attractive it is for companies to spend advertising dollars.

A photo displaying the logo of the American online social media and social networking service, Facebook and Twitter on a computer screen in Lille on Oct. 21, 2020. (Denis Charlet/AFP via Getty Images)

Advertising also underpins the dominance of the social media giants against traditional news publishers.

Federal Treasurer Josh Frydenberg once remarked: “For every $100 spent by advertisers in Australia on online advertising … $47 goes to Google, $24 to Facebook and $29 to other participants.”

User numbers are critical to a platforms survival with the share market sensitive to ups and downs in the metric.

“In October 2020, when Twitter announced disappointing user numbers, the stock fell by 18 percent, more than the 10 percent since Trump’s removal,” Nicholls said.

“Since Parler and Gab are currently difficult to access, the likely effect on Twitter is that users will exit, rather than switch. The advertising revenue loss is the same, however,” he added.

Nicholls noted that users could return to Twitter if a viable alternative platform is unable to navigate the requirements of Google Play and the Apple Store.

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