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Twitter Shares Tumble on Fear of Conservative Backlash

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By    |   Thursday, 29 November 2018 02:56 PM

Shares of Twitter Inc. tumbled 6 percent on Thursday after reports that Fox News had not tweeted for three weeks sparked fears of a backlash by conservatives protesting a perceived liberal bias by the company.

Twenty-First Century Fox Inc.’s (FOXA.O) Fox News has not tweeted to its 18.3 million followers since Nov. 8, an apparent boycott of the social network, Politico reported on Wednesday.

It stopped tweeting after activists used Twitter to post the home address of prominent news host Tucker Carlson, media news site Mediaite reported on Nov. 9. Demonstrators targeted Carlson’s home in Washington with a protest and shouted threats, he told the Washington Post.

Fox News and Twitter declined to comment.

Facebook (FB.O) and other social media networks are facing calls for increased regulation and criticism of their handling of user data and the role their platforms have played in a divisive U.S. political climate in recent years.

Still, analysts viewed Thursday’s stock drop as an over-reaction.

“I think the people who want to be alarmist will say this is the first step toward losing the conservatives, and that this could snowball. But at this point, I think that’s overly alarmist, and I don’t see it as a big deal. So I see this as a buying opportunity,” said FBN analyst Shebly Seyrafi, who has an “outperform” rating on Twitter’s stock.

Last month, Twitter posted quarterly results that far exceeded Wall Street’s estimates even after it purged millions of fake accounts used for disinformation and other abuses.

Conservatives in the past have complained about having their accounts unfairly closed by Twitter, and about alleged political bias in the California company’s rules.

Twitter this week reinstated the account of conservative commentator Jesse Kelly after U.S. Senator-elect Josh Hawley said that Congress should investigate the company after it closed Kelly’s account, and the account of Canadian feminist Megan Murphy.

The company said on Wednesday that it had suspended an account for impersonating Russian President Vladimir Putin.

Twitter stock (TWTR.N) has dropped almost 35 percent from a recent peak in July. Twitter shares were at $31.42 late Thursday, down $1.31., or 4 percent. Shares had hit a low of $29.87 earlier.

While it remains up nearly 30 percent for 2018, the shares have been mostly range-bound for the past four months after plunging in late July after monthly users dropped. The stock rose a mere 0.4 percent in Wednesday’s session, in contrast to a massive rally across the rest of the technology sector.

“The bullish bias of investors has been broken, and even a small news story can be used as an opportunity to sell,” said Michael Matousek, head trader at U.S. Global Investors. “The fact that Twitter didn’t participate in yesterday’s monster rally makes me think someone was liquidating a large position.”

Rob Sanderson, a managing director at MKM Partners who has a buy rating on Twitter shares, said in an email that the Politico story “shines a new light on the boycott.” However, he said it was a “weak” explanation for the shares to be down so sharply.

Material from Bloomberg and Reuters has been used in this report.

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Twitter Inc. shares fell in heavy volume in what was on track to be the social-media company's biggest one-day percentage loss in more than a month.
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Thursday, 29 November 2018 02:56 PM
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