Twitter shares plunge on Israel warning; Facebook dives
New York, United States | AFP – Twitter shares were hammered Tuesday following reports that Israel was weighing action against the company, adding to the growing woes of social media stocks.
Twitter shares closed down 10.4 percent at $31.735 following comments by Israeli Justice Minister Ayelet Shaked, who criticized Twitter for not doing enough to counter messages that incite violence against Israel.
Shaked warned that the Israeli government was considering "legal action" against Twitter.
"Terrorist organizations have been running from Twitter instead of Facebook. Simple reason: Facebook responds effectively to our inquiries in the removal of terrorist content. Twitter ignores," she tweeted.
"We are considering running legal measures against them," she wrote in comments translated from Hebrew.
Twitter’s tumble came as social media stocks overall were under pressure following widespread criticism of Facebook over reports that a data analysis firm hired by Donald Trump’s presidential campaign misused the data of some 50 million users.
Facebook shares fell 2.6 percent following reports the Federal Trade Commission was investigating the company over the episode and whether it violated a 2011 consent decree over the handling of consumer data.
Shares of Facebook had already lost 6.8 percent on Monday.
"Facebook is unregulated and very profitable but concerns over future regulation are now at a fever pitch. Regulation would likely increase costs," Briefing.com said in a note.
"Another risk is the increased potential for users to shun the company’s flagship social network."
Two other social media companies also fell, with Snap losing 2.6 percent and Pandora Media giving up 1.9 percent.