How to possibly make easy money from Trump’s battle with Twitter and Facebook

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

The escalation in the battle between President Trump and social media companies such as Twitter and Facebook could dent the investment theses on each stock near-term, pros say, so it’s likely investors will rotate into less riskier big cap tech stocks.

“I think the trade [on the social media stocks] is to stand back a bit and see how this shakes out. It seems like some sort of regulation on the social media and search names has been coming for a long time. To me there are better places in the market you can go, especially in tech. You can go to a Microsoft. You can go to an Apple. You could go into some of these stay-at-home stocks so you don’t take on that risk around social media regulation,” said Sevens Report Research founder Tom Essaye on Yahoo Finance’s The First Trade.

Shares of Twitter (TWTR) fell 2% and Facebook (FB) dipped slightly on Thursday as Trump ratcheted up pressure on the social media giants. Following Twitter’s decision this week to label certain Trump tweets with blue fact checking links, the president said he will sign an executive order Thursday that targets a 1996 statute that protects the companies from lawsuits pertaining content policing.

“This will be a Big Day for Social Media and FAIRNESS!,” Trump tweeted to his 80.4 million followers Thursday morning.

El presidente Donald Trump responde preguntas de los reporteros durante un evento en la Rosaleda de la Casa Blanca, en Washington, el martes 26 de mayo de 2020. (AP Foto/Evan Vucci)
El presidente Donald Trump responde preguntas de los reporteros durante un evento en la Rosaleda de la Casa Blanca, en Washington, el martes 26 de mayo de 2020. (AP Foto/Evan Vucci)

Argued Twitter founder Jack Dorsey in a tweet of his own regarding the labeling decision: “This does not make us an “arbiter of truth. Our intention is to connect the dots of conflicting statements and show the information in dispute so people can judge for themselves. More transparency from us is critical so folks can clearly see the why behind our actions.”

Although the executive order is likely to be held up in the courts, the mere threat of future costly lawsuits could cause concerns among investors in Twitter and Facebook. To that end, shares of Microsoft (MSFT), Apple (AAPL) and Amazon (AMZN) all traded higher Thursday — an indication of the rotation perhaps already beginning. All three big cap tech names offer up far less regulatory risk near-term than social media companies. Moreover, the three are coming off very solid first quarters despite the global coronavirus pandemic.

“I like tech, just a different sub-sector of it,” Essaye said.

Soon, Essaye may not be alone on that trade.

This article was originally published on finance.yahoo.com/news/.

Home of Science
Follow me

- Advertisement -

Discover

Sponsor

Latest

See Tesla’s Cybertruck roll through the streets with Elon Musk and Jay Leno

Let me warn you all up front: the audio in this teaser for Elon Musk's upcoming appearance on Jay Leno's Garage is *badly* out of sync...

China’s NetEase targets global expansion with $2.6 billion HK listing

Chinese online gaming firm NetEase plans to raise about $2.6 billion to fund expansion through its secondary listing which began on Monday, a term...

This is the greatest mistake an investor can make, according to the founder of the world’s biggest hedge fund

  ‘The greatest mistake of all investors is to think that what has done well lately is a better investment rather than more expensive. And...

Coronavirus update: Worldwide count tops 5M as US inches toward reopening; AstraZeneca gets $1B

The global case count hit a new grim milestone Thursday, surpassing 5 million, as the World Health Organization said the virus is showing no...

Tesla stock is riding high as investors wait to hear effects of coronavirus

This article is part of a series tracking the effects of the COVID-19 pandemic on major businesses, and will be updated. It was originally...
Home of Science
Follow me