Twitter’s Trump Ban Puts Stock at Rock Bottom of S&P 500

(Bloomberg) -- Just like Donald Trump, Twitter Inc. stockholders have lost out this month.

While the former president was being permanently banned from the social media platform in the wake of the riot at the U.S. Capitol, investors were seeing the value of their holdings shrink.

Twitter stock is down 12% thus far in 2021, based on its early trading on Thursday, at one stage slipping back below the $45.10 at which the stock opened on the day of its initial public offering in November 2013. The January performance is the weakest among components of the S&P 500 Index, which itself is up about 2.5% year to date.

The decision to ban Trump, who had more than 88 million followers on his @realDonaldTrump account, could have a negative impact on users and engagement, at least in the short term, according to analysts. Rosenblatt Securities said the move “all but secures” a “dismal” near-term outlook as it leaves “little room to deliver positive ’21 results.”

Separately, Argus Research speculated that Twitter “could lose several million” daily active users as a result of the ban, and that the move could “further push Congress to move ahead with its anti-monopoly activities.”

Twitter representatives didn’t immediately return emails seeking comment.

Twitter’s January stock decline is notable among social-media stocks. Facebook Inc., which suspended Trump’s account, is down a more modest 2.1%. Pinterest Inc. is up 10% and Snap Inc. -- which permanently banned the former president -- has risen 4.3%. Both were standout performers last year, with Snap tripling and Pinterest up more than 250%.

Twitter also outperformed in 2020, rising nearly 70% over the course of the year despite some weak quarterly reports. Many analysts remain optimistic about its longer-term prospects, especially given an improved view for digital advertising.

Earlier this week, Bloomberg Intelligence wrote that Trump’s ban should have a “muted” impact on social-media companies over the long term, as improved average revenue per user, higher engagement, and “ad budgets shifting to digital may offset any deceleration in monthly active users.”

Twitter, which is scheduled to report fourth-quarter results in February, was trading 0.7% higher in premarket trading.