Twitter Inc. (TWTR) - Get Report shares slumped lower Wednesday after President Donald Trump said the government could "strongly regulate', or even "shut down" social media platforms deemed unfair to conservative political views.
The threat followed a move by Twitter last night to 'fact check' a Tweet from the President that alleged the potential for widespread abuse of absentee ballots in the coming election. Trump said Twitter's actions are 'completely stifling free speech', even as he continued to freely express his views on the site's free social media platform with his 80.3 million followers.
"Republicans feel that Social Media Platforms totally silence conservatives voices. We will strongly regulate, or close them down, before we can ever allow this to happen. We saw what they attempted to do, and failed, in 2016," the President said through his verified Twitter account.
"We can’t let a more sophisticated version of that happen again. Just like we can’t let large scale Mail-In Ballots take root in our Country," he added. "It would be a free for all on cheating, forgery and the theft of Ballots. Whoever cheated the most would win. Likewise, Social Media. Clean up your act, NOW!!!!"
Twitter shares were marked 3.9% lower in early Wednesday trading, against a 0.18% slip for the Nasdaq, to change hands at $32.68 each.
Earlier this week, Twitter told TheStreet that it is "accelerating" a planned expansion of its labeling policies.
"We're expanding the labeling work we've done for COVID misinformation to cover conspiracy theories like this," said a Twitter spokesperson. "Tweets that fall into this category would get a label and would direct people to a landing page with the latest facts."
Weeks ago, Twitter announced new guidelines designed to mitigate COVID-19-related misinformation. Under the new system, Twitter applies labels to false or misleading posts related to the pandemic, and removing them if the risk of harm is deemed severe. Posts that contain disputed claims will carry either a label or a warning depending on the severity of the risk.
The social media firm reported strong trends in monthly and daily active user counts in the COVID-19 pandemic, but warned in March of a pullback in advertiser demand. Twitter shares are up about 5% year to date.
“Given the number of followers Trump has, combined with the comments and retweets around Trump's content, the platform benefits from more opportunities to serve ads to its users," said Yuval Ben-Itzhak, CEO of the social marketing firm Socialbakers. "The more retweets and comments, the greater the supply of users who are available to respond to the demand from brands to serve ads.”