- Donald Trump has threatened to crush Twitter and Facebook.
- His tweets dragged the stocks significantly lower.
- The situation offers a buying opportunity for investors looking to get into social media stocks.
This week Donald Trump turned on one of his greatest allies, Twitter (NYSE:TWTR). The social media platform has long been the president’s megaphone, allowing him to speak directly to the American public in an unfiltered way. But on Tuesday, the relationship changed when Twitter included a “fact check” warning on two of Donald Trump’s tweets.
Twitter questioned the validity of Donald Trump’s statements. | Source: Twitter
The tweets in question framed mail-in voting as being extremely vulnerable to fraud. The platform slapped a link on the tweets encouraging people to “get the facts.”
Twitter’s Facts Enrage Trump
“The facts” flagged by Twitter are that Donald Trump’s claims about voter fraud are unsubstantiated, according to CNN and the Washington Post.
While questioning the president was likely to upset him, using two of his most hated publications to make the case was the icing on the cake. There’s no way Donald Trump wasn’t going to explode about this. And he did.
Donald Trump launched a tweetstorm following the fact check. | Source: Twitter
Despite the rage tweets, Twitter left the links in place. That prompted Trump to offer a final, cliff hanger:
Big action to follow!
Donald Trump warns of “big action” coming up. |Source: Twitter
Twitter Stock Suffers
The markets digested Trump’s threats and sent both Twitter and Facebook (NASDAQ:FB) stocks lower.
Both TWTR and FB made their way lower in the wake of the dispute. | Source: Yahoo Finance
The next few days are likely to be volatile as Trump continues his attack on social media platforms. But ultimately, this could become a tremendous buying opportunity for investors that missed the rally the two stocks have enjoyed over the past month.
In reality, Donald Trump can’t shut down Twitter or Facebook because he needs them too much.
Twitter has become a huge part of Trump’s persona, and he uses it to connect with his supporters. Without large campaign rallies this election season, social media is a vital way for Trump to get his supporters excited to vote.
Trump Plans Executive Order
Donald Trump’s rage of Twitter’s fact check is unlikely to last. | Image: REUTERS/Carlos Barria/File Photo
He could, in theory, make it more difficult for companies like Facebook and Twitter to operate by revoking liability protections that keep the platforms from being sued when they ‘act in good faith.’ According to Bloomberg, Donald Trump is considering an executive order that would allow people to sue Facebook and Twitter if their posts are taken down or suppressed.
That would open up a can of worms for the two firms, who’ve been criticized in the past for not acting fast enough to block hate speech or take down fake news. The executive order could also open an investigation into whether the firms have been using deceptive practices.
No one wants to pick a fight with the government—that’s bad for business. But the most likely outcome is that this ordeal turns out to be benign. That would be a good thing for investors, because it’s expected to spark a significant pullback over the next few days, offering a better entry point for TWTR and FB.
Disclaimer: This article represents the author’s opinion and should not be considered investment advice from CCN.com. The author holds no investment positions in the above-mentioned securities at the time of writing.
This article was edited by Sam Bourgi.