On Aug 28, President Donald Trump took to Twitter, slamming Alphabet, Inc.’s GOOGL Google that Google News prioritized negative coverage and rigging search results against conservatives. Moreover, he also warned other social media platforms like Facebook, Inc. FB and Twitter, Inc. TWTR of rigging results and giving preference to negative news stories about him. However, the claims have been dismissed by online search experts.
That said, this isn’t the first time that Trump has targeted tech and media companies. He had earlier expressed his dislike for Amazon.com, Inc. AMZN, more so because of its CEO Jeff Bezos, who owns Washington Post that has been critical of the President and his policies. Interestingly, every time Trump has accused these tech companies, their shares have declined straight away. However, the accusations are unlikely to have any significant long-term effect on companies given that tech stocks have been driving markets for while now.
Trump Takes on Google, Facebook, Twitter
On Aug 28, Trump targeted search engine giant Google and social media platforms Facebook and Twitter at the Oval Office, stating that these companies are “Treading on very, very troubled territory” after earlier in the day accusing the search giant of rigging results to prioritize negative coverage and left-leaning outlets. The President had earlier tweeted: “Google search results for “Trump News” shows only the viewing/reporting of Fake News Media.” In another tweet he said: “This is a very serious situation – will be addressed!”
In response, Google issued a statement claiming that its searches are designed to give users relevant answers. Trump’s accessions follow his Aug 24 tweet where he claimed that “Social Media Giants are silencing millions of people.” Understandably, Trump doesn’t like the search results Google shows and considers them to be bad.
However, the bigger picture is somewhat different. It isn’t that Google, Facebook and Twitter are the only ones to have drawn Trump’s ire, the entire familiar media falls under the “Fake News Media” umbrella. Google has been one of the key players in driving Nasdaq’s performance this year. However, Trump’s tweets immediately brought the company’s shares under pressure, declining 0.9%. Also, shares of Facebook and Twitter declined 0.7% and 1.1%, respectively, on Tuesday.
Tech, Media Companies Are Trump’s Soft Targets
A number of companies have drawn Trump’s ire since his election. However, tech and media companies have been slammed by him the most. Earlier this year, Trump had taken on Amazon. On Mar 28, news website Axios reported that Trump wants to take on the company’s growing powers and tax treatment.
Trump’s dislike for Amazon can be traced back to his bitterness toward Bezos, who also owns Washington Post that has often criticized the President and his policies. Trump has often attacked Washington Post and on one occasion, misleadingly referred to it as “Amazon Washington Post.” Amazon sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In March 2017, Trump had attacked ABC News, owned by The Walt Disney Company DIS, with a tweet: “Just watched the totally biased and fake news reports of the so-called Russia story on NBC and ABC. Such dishonesty!”
Price Performance: Year to Date
Like many other companies, tech and media giants have often been Trump’s targets. Interestingly, following Trump’s first attack, shares of most of these companies took a hit. Amazon’s shares plummeted almost 5% on Mar 28, erasing $30 billion of its market capitalization. However, Trump’s threats so far haven’t had any significant effect on the tech and media companies in the long term.
In fact, tech companies have been driving markets for a while and have been one of the best performers so far this year. Shares of Amazon, Google and Twitter have gained 65.3%, 18.3% and 47.9% on a year-to-date basis. Facebook, however, is one of the rare tech giants whose shares have declined 0.1% year to date. However, that is mainly because the company earlier this year got embroiled in a data misuse scandal and reported stagnating user growth in its last quarterly results.
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