donald trump twitter

Celebrity Comments Costing Big Companies Big Bucks

In today’s era of ultra-connectivity, celebrity comments can cause significant share market disruptions.

On Friday, Snapchat stocks fell 7%, knocking $1.5 billion off the value of its shares, after reality TV star Kylie Jenner tweeted her disappointment in the app’s recent redesign:

Sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad’.

And US President Donald Trump has also had a lot to say via Twitter. Consider the impact of some of Trump’s comments in recent years. On 6 December 2016, Trump tweeted:

Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!

Boeing’s share price subsequently fell 1%, shaving $1 billion off the value of their shares.

Lockheed Martin, producers of the Joint Strike fighter (JSF) F-35 program, also came under Trump’s scrutiny.  On 12 December 2016 Trump tweeted:

The F-35 and program and cost is out of control. Billions of dollars can and will be saved on military (and other) purchases after January 20th’.

The tweet led Lockheed Martin’s stock to fall 5% in just 13 minutes, though, as with Boeing, the firm made up some of the lost ground later that day. 

No one is safe from Trump’s firing line

And it’s not just aircraft companies that feel the sting of Trump’s tweets. In January 2017, Toyota shares plunged after Trump responded to Toyota’s plans to reportedly build a new factory in Mexico to make cars for the US market. Trump’s response:

Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax’.

Toyota shares lost around $1.2 billion in value in just five minutes due to the tweet, falling 0.5%.

But perhaps one of the most controversial Trump tweet’s was in relation to department store Nordstrom’s decision to drop Ivanka Trump’s accessories and clothing line. On 9 February 2017, Trump immediately came to his daughter’s defence, tweeting:

My daughter Ivanka has been treated so unfairly by @Nordstrom. She is a great person — always pushing me to do the right thing! Terrible!’.

Strangely, Nordstrom’s stock fell initially, it later shook off Trump’s comments to close the day 4% up.

For the media, Donald Trump’s tweets are all grist for the mill. Even his ongoing proclamations about ‘fake’ news add to the growing media circus hanging on his every word. But corporations and shareholders must be nervous whenever Trump directs his comments towards their investments.

The pen may indeed be mightier than the sword, but even the written word is often ‘trumped’ by just 280 characters, and the instantaneous reach of the tweetosphere.

By Craig Henderson

The Australian Tribune Editorial

The Australian Tribune Editorial

The Australian Tribune is an unorthodox news service. Your Australian Tribune editorial team deliver the unfiltered stories that could impact your daily life — political and economic stories you’re unlikely to get anywhere else. And we’re not afraid to step on some toes to do it. We are honest, conservative and never dull. We are an independent service, meaning we don’t answer to shareholders or outside advertisers. This helps avoid conflicts of interest that inhibit mainstream sources, which keeps our voice independent. The Australian Tribune is owned and operated by Port Phillip Publishing.
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