Twitter's shares fall, market cap plummets — and Jack becomes a figure of fun
Censorship-happy Twitter is having trouble attracting new followers for some curious reason. These days, all it is attracting are titters.
And that's curious stuff.
Twenty years ago, I used to cover billionaires for Forbes, helping compile the annual Forbes list.
One thing I learned about billionaires is that they hate losing money (which is logical — they're billionaires — but I saw it up close). Billionaires also closely follow their peers. Never have I seen a more status-obsessed bunch.
That's why what's going on with Twitter has me speculating about what must be going through Twitter CEO Jack Dorsey's head with the company's likely timed Friday night news dump about shutting down President Trump's 80-million-plus-follower account.
According to MarketWatch, in a report just out:
Twitter TWTR, -6.41% announced Trump’s permanent suspension after trading hours Friday and it fell 6% before trading started Monday morning. That blotted out approximately $2.5 billion in market value, according to Reuters.
That tallies with one analyst estimated from 2017, which said that Trump generated an estimated $2 billion for the site by bringing in users, keeping them on the site to read what he had to say — and scrolling across ads in the process.
By mid-day, shares were trimming losses, down almost 7% after bouncing off a low of approximately 11%. Twitter shares closed Monday over 6% off.
MarketWatch noted that Twitter had flushed about $2.65 billion of its then–$40 billion market cap straight down the toilet in just one day over this foolish move, which drew condemnation from quarters as unexpected as the ACLU, top Russian dissident Alexei Navalny, and Trump-hating German chancellor Angela Merkel, of all people. That stings. MarketWatch noted that it could be concluded that Trump's presence on its platform was in that missing $2.65 billion. Twitter's share prices are opening down today, which could be a sign that this isn't over.
As I noted in my item a few days ago, market analysis shows that Twitter has been having a lot of trouble gaining new followers, it's missing targets and projections, and it's been a problem for the past year.
The people at Twitter seem to know how to optimize making profits without attracting new followers, but without attracting new customers whose data they use, their outlook can't be terribly exciting. They've actually been treading water on the stock front for months. Earlier this year, their market cap went as high as $56 billion. It's now somewhere in the thirties since taking out Trump.
So they're bleeding money in an amazing self-inflicted wound to shareholder value, all to satisfy their ego-driven urge to take out Trump. That's a bad decision, which might just affect their capacity to attract the kind of customers they actually value: the ones who buy stock.
According to MarketWatch:
This is really bad if it goes against the market direction.
And maybe just as alarming for status-conscious Jack, now Twitter's tiny upstart rivals are making Twitter a figure of mockery and fun.
This ran on upstart Twitter rival Gab, which is gaining 10,000 followers a day, according to RedState:
Gab trolling Twitter via Twitter 😀 pic.twitter.com/EHxuhLA344— Jim Corr (temp acc. @JimCorrSays in dispute) (@Says2Jim) January 11, 2021
RedState added this, noting that @Jack was celebrating Parler's removal from other platforms, which is hardly a thing to brag about — deleting your rival through the good offices of your business cronies acting as a trust instead of out-competing them:
Twitter was a spoil sport, apparently didn't like being mocked and seems to have deleted the tweet.
People on the left then thought they could go after Gab, but no such luck. Gab has its own servers so they're not at the mercy of Amazon.
And this is probably going to be my favorite tweet of the year:
They have the best comebacks aswell 😉 pic.twitter.com/EyEikIRAIC— Marie 🇮🇪 💚☘ (@DubhLinn76) January 11, 2021
What we have here is the spectacle of a giant, seemingly invulnerable tech giant showing signs of Ozymandias-like vulnerability, imagining it's too big to be vulnerable.
As Big Tech goes crazy and cuts its own money streams to Get Trump, all we can note is that that's not market behavior. Market behavior is to maximize shareholder value and do all possible to increase profits, something these people aren't bothering to do. They apparently think they're a monopoly, and right now, they apparently are. But the upstart rivals are still coming, and as the late, great Herb Meyer noted, change often comes from a direction you never suspect. Jack may still be focused on lording it over Trump and crushing small rivals, but there's a hell of a bigger billionaire on the horizon, bigger than they are, bigger than Buffett, Soros, or Gates, which is the censorship-hostile, apparently free market–friendly Elon Musk, who just recently dumped California and moved his Tesla car operations to Texas. He recently surpassed all of these Trump-hating petty tyrants in wealth and doesn't seem to be an enemy of conservatives or libertarians.
Jack may lash out against Trump, and be happy to cut his own throat in the process, but there's a zeitgeist out there that suggests that Big Tech might just be starting to be eclipsed. I hear the strains of Götterdämmerung as Jack goes nuts and Musk rises in net worth wealth.
Image credit: Logo, upside-down.