Trump Will Remain Off Facebook, for Now
Here’s what it means for the stock.
2 minA body funded by Facebook to arbitrate decisions about content issued its first major ruling early Wednesday, saying the social network’s ban on former President Donald Trump‘s account was fair, but describing his indefinite suspension as inappropriate.
Facebook (ticker: FB) shares were choppy when the market opened, ticking up 0.2% to $318.63 as investors processed the latest batch of quarterly earnings and a private-sector employment report.
The decision about Trump’s account, which punts the matter back to Facebook, is unlikely to have a significant impact on the stock. As Barron’s wrote in our April 2 cover story, the company has faced controversy after controversy, with little impact on its profit and revenue growth over the years. Wednesday’s decision is no different.
Fifty-eight sell-side analysts cover Facebook and none made a change to their target price or recommendation on shares immediately after the decision.
Facebook’s Oversight Board said that the former president’s posts on the platform after the Jan. 6 riot at the U.S. Capitol, as Congress was certified the 2020 election, violated the company’s rules
“However, it wasn’t appropriate for Facebook to impose the indeterminate and standardless penalty of indefinite suspension,” the board wrote. “Facebook’s normal penalties include removing the violating content, imposing a time-bound period of suspension, or permanently disabling the page and account.”
The Oversight Board told Facebook to “determine and justify a proportionate response” that follows the rules the company applies to other users.
Facebook created the oversight board and provided funding for it to handle final decisions about a select batch of content. The company has vowed to abide by the body’s recommendations in specific content cases brought before it. Facebook has 30 days to publish a response to the decision and recommendations.
“We will now consider the board’s decision and determine an action that is clear and proportionate. In the meantime, Mr. Trump’s accounts remain suspended,” said a blog post by Nick Clegg, Facebook vice president for global affairs and communications.
Twitter permanently banned Trump from its platform after the incident at the Capitol. At the time, at least one analyst was concerned that kicking the former president off the site could damage the company’s user count and revenue.
But fears of financial problems as a result look to be unfounded. Twitter’s latest quarterly results were better than analysts expected. Twitter hasn’t signalled it plans to re-evaluate the decision.
Facebook stock has advanced 6.8% since Barron’s cover story, as the S&P 500 index rose 3.9%.
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“Only with competition can we become stronger and allow the industry to remain healthy,” Ma said
2 min
Alibaba Group co-founder Jack Ma said competition will make the company stronger and the e-commerce giant needs to trust in the power of market forces and innovation, according to an internal memo to commemorate the company’s 25th anniversary.
“Many of Alibaba’s business face challenges and the possibility of being surpassed, but that’s to be expected as no single company can stay at the top forever in any industry,” Ma said in a letter sent to employees late Tuesday, seen by The Wall Street Journal.
Once a darling of Wall Street and the dominant player in China’s e-commerce industry, the tech giant’s growth has slowed amid a weakening Chinese economy and subdued consumer sentiment. Intensifying competition from homegrown upstarts such as PDD Holdings ’ Pinduoduo e-commerce platform and ByteDance’s short-video app Douyin has also pressured Alibaba’s growth momentum.
“Only with competition can we become stronger and allow the industry to remain healthy,” Ma said.
The letter came after Alibaba recently completed a three-year regulatory process in China.
Chinese regulators said in late August that they have completed their monitoring and evaluation of Alibaba after the company was penalized over monopolistic practices in 2021. Over the past three years, the company has been required to submit self-evaluation compliance reports to market regulators.
Ma reiterated Alibaba’s ambition of being a company that can last 102 years. He urged Alibaba’s employees to not flounder in the midst of challenges and competition.
“The reason we’re Alibaba is because we have idealistic beliefs, we trust the future, believe in the market. We believe that only a company that can create real value for society can keep operating for 102 years,” he said.
Ma himself has kept a low profile since late 2020 when financial affiliate Ant Group called off initial public offerings in Hong Kong and Shanghai that had been on track to raise more than $34 billion.
In a separate internal letter in April, he praised Alibaba’s leadership and its restructuring efforts after the company split the group into six independently run companies.
Alibaba recently completed the conversion of its Hong Kong secondary listing into a primary listing, and on Tuesday was added to a scheme allowing investors in mainland China to trade Hong Kong-listed shares.
Alibaba shares fell 1.2% to 80.60 Hong Kong dollars, or equivalent of US$10.34, by midday Wednesday, after rising 4.2% on Tuesday following the Stock Connect inclusion. The company’s shares are up 6.9% so far this year.
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