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Twitter Stock Down 20% On Fears Of Trump Election Loss

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Twitter Inc (NYSE:TWTR) stock is down by 20%. Shares of Twitter had crashed by 19.8% at 11 am, Friday. The Twitter stock went down despite the company reporting third-quarter earnings that apparently blew away the consensus, Twitter reported earnings of $0.19 per share.

Twitter Stock crash by 20%

Donald Trump is a big asset for Twitter, his tweets have repeatedly made headlines, moved the structure of financial markets, and sparked debates all across social media. Trump has been an active user on Twitter, often using his account to tweet regarding conspiracy theories, voicing insults at political foes, and several media outlets. Trump has also made use of Twitter to boast regarding political victories, his followers currently stand at 87.3 million. However, Twitter has flagged some of Donald Trump’s tweets for glorifying violence. Tensions between the White House and Twitter have considerably intensified this year.

The pandemic has reduced many people to their homes with not many distractions except Twitter and other social media platforms. With elections drawing near, the Twitter audience has considerably expanded to keep up with the political happenings of the country. It was expected that Twitter will attract an even greater audience this fall. However, in the third quarter, the users drastically fell below expectations for approximately 195 million. This happened despite Twitter users rising 29% from last year. Twitter added only 1 million more users from the end of June to its records presently. This drastically falling number of users was not greeted by investors with enthusiasm.

In comparison, Pinterest (PINS), the platform used for photo sharing gained up to 26 million more users in the past months. Meanwhile, Snap (SNAP), the social media application known for having the feature of vanishing photos, gained 11 million new users. Michael Levine, an analyst at Pivotal Research stated that the worry is “misplaced.”

Will users leave Twitter if Trump loses the election?

He posses a Buy rating on the stock which has helped him increase his price target to $64. Meanwhile, shares owned by Twitter are up 32% this year, at $41.70 as of Friday afternoon. This makes Twitter beat the S&P 500’ s gain of less than 1%. If Trump loses  the presidential election“maybe it drifts a little lower,” Levine said in a statement, “but we think the risk/reward is getting even more compelling.” He referred to this as a “fantastic entry point.”

“We think Twitter is in a different spot than when they entered the pandemic,” he said. “They have cemented their spot as a critical platform for news consumption.”

One user tweeted, “Have you looked at big tech stocks? Twitter down 20%. A day of reckoning is likely finally coming if you follow the $$. Unfortunately, they also drive a lot of investment funds.” While another tweeted, “The stocks are down because these companies have taken an activist roll in suppressing American voters during the most consequential election in our history- I’ve been divesting from these companies, we all should. They have too much power.”

About the author

Saman Iqbal

Saman is a law student. She enjoys writing about tech, politics and the world in general. She's an avid reader and writes fictional prose in her free time.

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