Trump calls Facebook the enemy of the people, Meta’s stock sinks
Mar 11, 2024, 4:10 PM
Left: Meta's CEO Mark Zuckerberg; right: Republican presidential candidate and former President Donald Trump. (Evelyn Hockstein, Reuters; Evan Vucci, AP via CNN Newsource)
(Evelyn Hockstein, Reuters; Evan Vucci, AP via CNN Newsource)
(CNN) — Facebook once again finds itself in the crosshairs of former President Donald Trump. And that’s making some traders on Wall Street nervous.
Meta Platforms (META), the owner of Facebook and one of the stars of the recent market rally, fell about 4% on Monday after Trump called into CNBC and labeled Facebook “an enemy of the people.”
Meta shares also retreated 1.2% on Friday following a post by Trump on Truth Social where the former president blasted Facebook as “a true Enemy of the People!”
Meta’s market valuation has dropped by more than $60 billion since Trump’s attacks began Thursday evening.
No major news appeared to drive the Meta selloff, other than the condemnation from the former – and possibly future – president of the United States.
“It has everything to do with the comments from former President Trump,” Gil Luria, an analyst at D.A. Davidson, told CNN. “Facebook has gone through waves of being dragged into the political debate – and it never bodes well for them.”
Trump surprised many last week by reversing his stance on TikTok and coming out against the TikTok ban that many in Congress – including many Republicans – are pushing for.
Why? Well, Trump argues that banning TikTok would help Facebook, a company the former president has a long history of battling with.
“The thing I don’t like is that without TikTok, you can make Facebook bigger, and I consider Facebook to be an enemy of the people, along with a lot of the media,” Trump told CNBC Monday morning before US markets opened.
Facebook imposed a two-year ban on Trump in the wake of the Jan 6, 2021, Capitol riot. Meta reinstated Trump’s Facebook and Instagram accounts in February 2023.
“I think Facebook has been very dishonest. I think Facebook has been very bad for our country, especially when it comes to elections,” Trump said.
Meta did not respond to a request for comment.
Attacks are being noticed
Investors are clearly taking notice of the attacks from Trump. At one point, Meta shares were down about 5% Monday, leaving them on track for the worst day since December 2022.
Luria, the D.A. Davidson analyst, said Trump’s comments raise concerns about Facebook becoming a target of Washington once again.
“When a presidential candidate refers to them as the enemy of the people, that really brings them back into the center of the debate – where they haven’t been for a few years,” Luria said.
Specifically, Luria said Trump, if elected president, could pressure Facebook by making it harder for Meta to make acquisitions in the future. The company’s prior acquisitions of Instagram and WhatsApp have been central to its growth.
“If it can’t buy the next great thing in the future, it will have trouble competing,” Luria said. “There are pretty impactful things a president can do, not to mention using the power of the podium to limit a company’s attractiveness to a certain voter base.”
Of course, Trump himself is very much involved in social media.
US regulators recently gave the green light to a controversial merger between Truth Social owner Trump Media & Technology Group and a blank-check company. If approved by shareholders later this month, Trump would own a dominant stake in the newly-public company that could be worth billions.
The full House is set to vote this week on a bill that would give TikTok roughly five months to separate from its China-linked parent company or else app stores in the United States would be banned from hosting the app on their platforms.
President Joe Biden has said he is prepared to sign the TikTok bill into law if it passes Congress.
