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Meta Platforms, the parent company of Facebook, faced a sharp decline in its stock prices on Monday, shedding about 4% of its value following critical comments from former President Donald Trump. Trump’s scathing remarks on CNBC referred to Facebook as “an enemy of the people,” causing concern among traders on Wall Street.
“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 on Monday.
Market Reaction to Trump’s Comments
The decline in Meta’s shares continued from Friday when Trump took to his Truth Social platform to criticize Facebook again, describing it as “a true Enemy of the People!” This trend has resulted in Meta’s market valuation plummeting by more than $60 billion since Trump’s verbal attacks began.
Trump’s Reversal on TikTok Ban
Trump’s unexpected reversal on TikTok last week has added another layer of complexity to the situation. The former president now argues against banning TikTok, suggesting that such a move would benefit Facebook. This contrasts the stance many in Congress, including Republicans, have taken in favor of banning TikTok.
Meta’s Troubles with Trump
Trump’s criticism of Facebook comes after the platform imposed a two-year ban on him following the January 6, 2021, Capitol riot. While Meta reinstated Trump’s Facebook and Instagram accounts in February 2023, the former president remains highly critical of the company.
“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 in his recent CNBC interview.
Investor Concerns and Analyst Insights
Investors are taking Trump’s comments seriously. Meta shares were down approximately 5% at one point on Monday, marking one of the worst trading days for the company since December 2022. Analysts, including Gil Luria from D.A. Davidson, suggest that Trump’s remarks have raised concerns about Facebook once again becoming a target of political scrutiny in Washington.
Impact on Meta’s Future
Luria highlights potential challenges for Meta if Trump were to return to office, suggesting that future acquisitions, which have been crucial to Meta’s growth, could face obstacles. Meta’s past acquisitions of Instagram and WhatsApp have played a central role in the company’s expansion.
“If it can’t buy the next great thing in the future, it will have trouble competing,” Luria emphasized.
Trump’s Involvement in Social Media
Interestingly, while Trump has been a vocal critic of Facebook, he is also deeply involved in the social media landscape himself. US regulators recently approved a merger between Trump Media & Technology Group, the owner of Truth Social, and a blank-check company. This move could result in Trump owning a significant stake in the newly-public company, potentially worth billions.
Congressional Action on TikTok
In related news, the full House is gearing up to vote on a bill this week that would require TikTok to separate from its China-linked parent company ByteDance. Failure to do so would result in app stores in the United States being prohibited from hosting TikTok. President Joe Biden has indicated his willingness to sign the bill into law if it passes Congress.
