According to a report from the Wall Street Journal, President Donald Trump is preparing to sign an executive order on social media platforms this week.
The President, who is currently engaged in a dispute with Twitter, will reportedly order federal regulators to hold private companies responsible for inhibiting free speech.
In a draft obtained by the Journal, the order would be wide-reaching, potentially revoking protections given to companies under the 1996 Communications Decency Act. The act gives businesses the freedom to moderate the content on platforms that they own. If signed, the order could lead to the withdrawal of federal agencies from advertising contracts on social media.
Twitter Storm Surrounding the Latest News
President Trump has been as active as ever on Twitter this week, with a few standout moments leading up to the current news.
Earlier this week, the President posted for a second time regarding a debunked conspiracy theory surrounding the death of an aide to Joe Scarborough in 2001. The posts received bipartisan criticism.
The President was also hit with a fact check label after saying that mail-in ballots would be “substantially fraudulent.”
Referring to Twitter and similar companies, the President tweeted late Wednesday night saying that “Big Tech is doing everything in their very considerable power to CENSOR in advance of the 2020 Election. If that happens, we no longer have our freedom. I will never let it happen! They tried hard in 2016, and lost. Now they are going absolutely CRAZY. Stay Tuned!!!”
Pundits believe that the latest post is directly referencing the incoming executive order.
Will This Impact Twitter Stock?
Twitter Inc. (NYSE: TWTR) saw its stock decline -2.69% in after-hours trading on Wednesday. Investors fear that if legal protections are revoked, the company could lose popularity as a social media platform.
However, it’s important to note that private companies like Twitter aren’t bound by the same free speech laws as the government. Twitter has an inherent right to moderate its platform. It’s likely that if the company is directly targeted by the White House, it would have a strong legal argument for operating as it does.
Twitter’s stock may continue to decline in the short term, especially with the negative news surrounding the company. However, consistent revenue growth and high income and EBITDA margins indicate that it’s still one of the best social media investments moving forward. There could be a significant upside at the other end of this temporary disruption.
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