Twitter Stock Rises Over $16 Billion 40 Days After Banning Trump

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Twitter CEO and co-founder Jack Dorsey gestures while interacting with students at the Indian Institute of Technology (IIT) in New Delhi on November 12, 2018. Twitter’s market capitalization has increased by more than $16 billion since banning Donald Trump from its platform.

Social media giant Twitter (NYSE: TWTR) shares unexpectedly skyrocketed to a new all-time high of $74.96 on Friday, Feb. 19, breaking the record set in 2013 during the second month of the company’s debut on the New York Stock Exchange. The bonanza comes six weeks after Twitter muzzled President Donald Trump in January by permanently banning the 45th President’s account.

On Jan. 8, two days after the Capitol building breach, Twitter permanently suspended Trump’s account in a broader effort alongside tech giants Facebook and Google to censor Trump and his supporters. Charges that the then-president had incited an insurrection were ultimately settled during Trump’s historic second impeachment trial, as the Senate voted to acquit.

Shortly after the ban, Twitter’s share price took a 10 percent tumble, falling from a pre-ban close of $52.33 before bottoming out at a low of $44.40 two weeks later on Jan. 19. 

Morgan Stanley building. Morgan Stanley is Twitter’s second largest institutional shareholder at slightly over 8 percent, or 64 million shares, according to February SEC Filings.
Morgan Stanley building. Morgan Stanley is Twitter’s second largest institutional shareholder at slightly over 8 percent, or 64 million shares, according to February SEC Filings. (Source: Alan Wu on Flickr CC BY-SA 2.0)

However, the dip proved to be merely a signal that Wall Street’s giants were predictably backing up the truck and buying low in advance of a big move north. 

On Feb. 1, Twitter closed at $52.66, regaining its entire $6 billion in paper losses. The company has since gained more than $16 billion in value in only 40 days after closing Feb. 16 at $73.96, an elementary lesson on how Wall Street’s market makers use popular events and the narrative surrounding them to engineer both price swings and media reports, which benefit their ultimate goal of buying low, selling high, and making record profits for their shareholders. 

Twitter executives on cloud 9

According to a Bloomberg report, Pivotal Research Analyst Michael Levine said in calls with analysts, Twitter’s executives were quite satisfied with the developments, “Both on the earnings call and analyst call back, we felt that management led with a swagger and a confidence we have not see[n] in some time.”

Bloomberg lauds Twitter as having always “commanded a cult-like following among investors,” and attributes the record trading price of the now $58 billion company to “eclips[ing] 20% growth in daily active users for five straight quarters” while being on track to do it again in the current quarter. Twitter’s proclaimed growth comes despite the removal of perhaps the most controversial President in history, one who racked up more than 50,000 tweets in 4 years to more than 88 million followers.

But earlier in the month, Twitter admitted in a Bloomberg Terminal statement that the future outlook may not be so rosy, “Looking beyond Q1, the significant pandemic-related surge we saw last year continues to create challenging comps,” the company wrote in its letter to shareholders.

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