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Why Twitter (TWTR) Share Plummeted?

On January 8, the microblogging site Twitter (TWTR) permanently blocked US President Donald Trump’s personal account due to the risk of inciting violence. Afterward, Trump declared that Twitter was “not about freedom of speech.”


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Twitter decided to block Donald Trump’s account after the riots in Washington on January 6 – during which some participants of the rally found themselves in the US Capitol, where the US Congress is sitting. Twitter temporarily blocked the US president’s account for twelve hours the next day. It also demanded the removal of three posts that violated Twitter’s rules. The social network threatened to permanently block Trump’s account if he continues to violate the rules.

A policy violation on January 8 resulted in the account being blocked permanently. Twitter (TWTR) said it had permanently blocked Donald Trump’s account due to continued incitement to violence in the wake of recent tweets from his account.

Over 88 million people followed Trump’s account, and the president left an average of approximately ten tweets a day. Analysts at investment bank JPMorgan Chase noted in September 2019 that Trump’s tweets often had a substantial impact on financial markets, especially those with the words “China”, “Democrats”, “billion” and “products”. A special index launched by the investment bank tracked Trump’s tweets and how they affected the markets. Sometimes the tweets were dedicated to specific companies, which also impacted the value of their shares, for example, negative mentions in tweets of Amazon, Lockheed Martin, and Twitter (TWTR) led to falls in their shares.

Such an instance occurred recently when Elon Musk urged his Twitter followers to “use Signal,” a reference to Signal Advance. This application allows users to send encrypted messages, driving Signal Advance’s price, a small component manufacturer whose stock trades over the counter, even higher. At the close of Monday’s trading session, the company’s stock had soared 438% and stood at $70.85, up from a closing price of 60 cents on January 6, a day before Musk’s tweet.

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