If Trump left Twitter it would cost the company $2bn claims analyst
Donald Trump tweets about everything from his viewpoint on global warming to "military solutions" to threats from North Korea, and now an analyst has estimated that without the president Twitter could lose one-fifth of its value.
An analyst has claimed Twitter's value could decrease by as much as $2bn if Trump left
Monness Crespi Hardt analyst James Cakmak told Bloomberg that he believes the social media company would see as much as $2bn in market value wiped out if @RealDonaldTrump fled the platform.
“There is no better free advertising in the world than the president of the United States,” said Cakmak.
The analyst's viewpoint is based on his belief that if Trump were to stop tweeting, then Twitter would experience something known as 'multiple compression' which happens when investors become skeptical on growth prospects. This results in a decline in stock value, despite the fact that nothing fundamental within the business would have changed.
Twitter doesn't comment on speculative forecasts like Cakmak's, but at the start of the year the company's chief financial officer Anthony Noto said that the president's proclivity for tweeting had "broadened the awareness of how the platform can be used," which he argued showed the "power of Twitter".
Trump's behaviour on Twitter, and the way he uses the platform as a tool to usurp the press and make official announcements, has embroiled the president in controversy countless times. Recently, a number of Twitter users took legal action against the president after being blocked by him, saying it was a naked attempt to ‘suppress dissent’ and violated the First Amendment.
Twitter itself has had a tough few years, but it has finally refined its strategy, positioning itself as the go-to platform for breaking news and live events. In its most recent quarterly earnings update its user growth stalled but outdid financial forecasts with revenue clocking in at $574m versus the $537m expected.