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Investing.com — Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR) both edged lower in premarket trade, hours after former President Donald Trump announced he will start a new social media company aimed at challenging their dominance.
Facebook stock fell 0.3%, while Twitter stock fell 0.8%, after Trump said he would launch a plaftorm called TRUTH Social under the aegis of his Trump Media & Technology Group “to stand up to the tyranny of Big Tech.”
The company is slated to go public through a merger with Digital World Acquisition (NASDAQ:DWAC), a special purpose acquisition company that listed in September. DWA shares rose 45% in post-market trading on the news.
Trump’s access to, and dominance of, social media in 2016 was the key to his successful bid for the U.S. presidency, and the news comes amid a flurry of reports suggesting that he intends to run again in 2024. A successful run will, however, be more difficult without access to mass platforms such as Facebook and Twitter. Both platforms banned Trump after January 6th, when his supporters stormed Congress in an attempt to stop the certification of Joe Biden’s election victory.
While his own platform will guarantee him access to a mouthpiece, it will be far from certain whether he can recreate the reach that he had with swing voters on an avowedly right-wing platform. Other platforms that have aimed at ‘rebalancing’ the social media sphere, such as Gab and Parler, have failed to draw mass readerships, and have had no visible impact on advertizing revenue at the larger platforms.
Facebook, which is reportedly set to drop an increasingly toxic brand from its corporate identity, continues to face threats from other directions meanwhile. The District of Columbia’s Attorney General on Wednesday ffiled a motion to add Mr. Zuckerberg as a defendant in a consumer-protection lawsuit filed three years ago over its role in the Cambridge Analytica scandal, when Facebook allowed the data of millions of users to be harvested without their consent. Private shareholders have already sued for damages related to that case, alleging that Facebook settled charges by the Federal Trade Commission for a much larger sum than was necessary as part of a deal which kept Zuckerberg off the charge sheet.
