Facebook, Alphabet and Twitter
To be sure, political sentiment already has moved shares of social media stocks Facebook (FB), Alphabet (GOOGL, GOOG) and Twitter (TWTR). Executives from all three firms have testified in front of Congress this year. President Donald Trump has used Twitter in an unprecedented manner.
But so far, other than some trading movements around various hearings, political factors don’t really seem to have moved the group all that much. In fact, all three stocks generally have gone in different directions.
GOOGL stock has tracked the broad market. Facebook stock has fallen due to higher spend and self-inflicted wounds. TWTR, even with a pullback of late, has been one of the better large-cap stocks in the market in 2018.
The key question still looms: will regulators in the U.S., and elsewhere in the world, start looking closer at these companies? Alphabet has faced antitrust penalties in Europe, but has been largely left alone stateside. Will that status quo remain? Can the company make a comeback in China after largely ceding that market to Alibaba (BABA)?
For Facebook and Twitter, in the U.S. both sides seem upset. Liberals worry about privacy and hate speech. Conservatives see the platforms as politically biased. It’s possible that a motivated Congress could enact tighter regulation, which might limit the ability of both companies to monetize valuable user data. And activists already have called for a ‘breakup’ of Facebook.
The political situation surrounding social media and big tech certainly isn’t going to resolve itself in 2019. But it very well could have an impact on stock prices next year. A nervous market already has sold off all three stocks to varying degrees in the last couple of months. More negative headlines in 2019 will accelerate that pressure.