With recent violent events demonstrating an unprecedented fracturing in American politics and undermining civil discourse, there have been few fundamental issues as important today as freedom of speech. At the center of this firestorm is Twitter (NYSE:TWTR). As you know, it made the controversial decision to permanently ban President Donald Trump from its platform. But was this the right move and how could it impact Twitter stock?
Due to all that has transpired over the last year, including the novel coronavirus, the contentious election cycle and the unrest in Washington, D.C., it’s difficult to recall anything else but turmoil when it comes to the Trump administration.
But pre-pandemic, Twitter stock arguably benefitted from the former President. For one thing, if there was any breaking news, it would happen on Twitter. As well, there was a comical love-hate affair involved between Trump and Twitter, like a sitcom marriage gone deliberately bad.
Well, there’s absolutely nothing funny that transpired when Congress met to count the electoral votes to confirm President Joe Biden’s victory. Yes, the protest did stall the vote count, essentially a formality in which nothing could be done to overturn the election results. But as the Wall Street Journal reported, Congressional affirmation finally came.
But the uproar cost lives, including that of a law enforcement officer. We could bicker about whether the fallen should have been there. But the bottom line is that people paid dearly for a political movement. Many other lives will probably be ruined permanently due to federal agencies’ criminal prosecutions.
I don’t want to go down the rabbit hole of explaining the granularity of the incident. But it’s important to understand the context. The country was deeply scarred by controversial events. People’s nerves are on edge because of the pandemic. Unfortunately, the situation was rife for escalation through social media platforms. And it escalated in the worst possible way.
On the surface, censorship isn’t the answer. However, that may be a moot point for Twitter stock. If you read Twitter CEO Jack Dorsey’s explanation, it appears he felt he had no other choice.
Twitter Stock Will Recover From the Malaise
For Dorsey, he’s in an unenviable position where neither the ardent Left nor the Right is satisfied with his explanation. For liberals and progressives, Twitter didn’t do enough to penalize President Trump for his many controversial tweets. For those on the Right, Twitter stock is an investment in the suppression and violation of free speech.
To both warring sides, the answer is a blunt one: it’s Twitter’s house so it gets to make the rules. Of course, I didn’t say it was a satisfying answer.
Ultimately, we must understand what we mean by freedom of speech. According to ConstitutionCenter.org, when Congress declared that it shall make no law abridging the freedom of speech or of the press, it meant generally that “…the government may not jail, fine, or impose civil liability on people or organizations based on what they say or write, except in exceptional circumstances.”
But the key point is that this freedom relates to our relationship with the government. ConstitutionCenter.org goes on to state, “The First Amendment does not protect speakers, however, against private individuals or organizations, such as private employers, private colleges, or private landowners. The First Amendment restrains only the government.”
I’m not a constitutional attorney, so I have zero authority on this matter. But I think it will be extremely difficult to hit Twitter stock on First Amendment violations. The underlying company is not a government entity. Further, it’s not denying offended users from establishing their own ideologically friendly social media networks.
Now, I understand the Right-leaning argument that Big Tech has become far too influential. From Twitter to Facebook (NASDAQ:FB) to Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), social media is in the driver’s seat. Additionally, it must be pointed out that according to the Pew Research Center, young Americans mostly get their news through social media.
Since Big Tech can basically censor opinions it doesn’t agree with, it has undue influence on public discourse. That’s a problem. But it’s not Big Tech’s fault.
It’s Nothing Personal…It’s Just Business
Inarguably, what transpired on Jan. 6, 2021 was a matter of personal choice. You could be there in Washington or you could not be. You could have done something regrettable or you could have acted with restraint.
In the same way, people can choose to just accept the news as presented and not conduct their own research. Is it Big Tech’s fault that many Americans have essentially become gullible? From Dorsey’s perspective, he wants to protect people from themselves. But the overriding culprit in my opinion is lack of personal responsibility and accountability, not Big Tech.
Regarding the banning of President Trump, I personally don’t agree with it. I think we can learn more through extending grace and forgiveness rather than cancel culture. However, Twitter stock is an investment, with many shareholders banking on the company’s sound judgment.
Because of that additional context, it’s possible that Dorsey made the best move for his organization. If you look around, extremism of any kind is just not popular. Sure, some platforms have niche followings, but niche usually doesn’t pay the bills.
Granted, Twitter stock will take a beating from the controversy. I don’t think the shares’ volatility is over yet. But if you’re anticipating a mass exit toward alternatives like Parler, I wouldn’t worry too much about it. If there was marketable demand for extreme ideas, I would be concerned. There isn’t. Inevitably (and ironically), it’s free market capitalism that will eventually exonerate Twitter.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.