Dive Brief:
- If President Donald Trump were to stop using Twitter, the platform might lose $2 billion — in other terms, one-fifth of its total market value — Monness Crespi Hardt analyst James Cakmak told Bloomberg, according to The Drum.
- Cakmak's view is based on the power of the @RealDonaldTrump handle in staving off what's referred to as "multiple compression," where investors sour on a stock based on its growth forecasts.
- Trump's use of Twitter has been questioned as an official line of communication from the White House, but it has kept political reporters abreast of updates from the president.
Dive Insight:
As a social media platform, Twitter has had a rough go of it in recent quarters. It's not growing its user base or ad revenue in any significant way, much to the chagrin of investors. At the same time, it's remained a favorite of the media, celebrities and the President of the United States, and retained value as a platform for breaking news in that regard.
Trump's presence on the micro-blogging platform has proved highly controversial, with some arguing the president's tweets at times have come close to violating the site's rules, including its harassment policy. While Twitter has contested those assessments in the past, Cakmak's speculation points to another reason why Twitter might be avoiding curtailing Trump's voice: it would be financially ruinous for its business, which is struggling in any case.
Even as Twitter's stature has diminished considerably in recent years — there was once a time where it stood nearly shoulder-to-shoulder with Facebook, which now has 2 billion users — it remains the go-to platform for world leaders. That's according to a study published in June from Burson-Marsteller, which found Twitter is the preferred channel for 276 heads of state and government and foreign ministers from 178 countries, representing 92% of all members of the United Nations.
