Twitter Plunges as Citron Says the ‘Toxic’ Site Is ‘Uninvestable’
(Bloomberg) -- Twitter Inc. shares plummeted after Citron Research said a report by Amnesty International documenting the abuse of women on the platform shouldn’t be ignored by investors.
"Twitter has become the Harvey Weinstein of social media," Citron said in its report, setting a new price target of $20. "Advertisers will soon be forced to take a hard look at all sponsorships with Twitter.”
The shares fell as much as 13 percent to $28.51, the most since July. The broader markets also fell amid concerns of a government shutdown.
Twitter has long been criticized for failing to limit harassment of women on the platform but a report earlier this week put the problem in a stark light. Amnesty International -- with Element AI, a human rights watchdog -- found that about 7 percent of the tweets that prominent women in government and journalism receive were abusive or problematic. Women of color were 34 percent more likely to be targets than white women, and black women were 84 percent more likely than white women to be mentioned in problematic tweets. Amnesty International described Twitter as a “toxic place for women.”
Citron said that when it read the Amnesty report, “we immediately knew the stock had become uninvestable.” The firm said it thinks the “story has just begun and advertisers will be forced to make more morality-based brand building decisions.”
The report comes as Twitter’s financial performance has steadily improved, partly as a result of the company’s efforts to make the service more personalized. Citron has changed its view of Twitter several times this year. In January, Citron called 2018 "the year for" Twitter, putting a target price of $35 on the stock. In March the firm cut its near-term target and said Twitter was more vulnerable than other social media to privacy regulation. In August, Citron set a price target of $52.
It’s been a rough year for social media. All of the major companies have faced backlash from a myriad of issues from political manipulation of the platforms to privacy breaches. Facebook Inc. took another hit Wednesday after revelations about the sharing of user data to partner companies and a lawsuit by the District of Columbia attorney general.
At the same time, tech companies have increasingly become targets of social activists and Amnesty International has turned its watchdog role -- best known for its efforts to free international political prisoners -- toward them. Recently more than 60 human rights groups, including Amnesty, demanded Google end an effort to launch a censored search engine in China. Amnesty also recently accused Google of helping the Chinese government spy on its citizens.
Earlier this year Twitter said it was working with researchers on ways to measure the health of discourse on the site, using academics to develop metrics to spot incivility and intolerance. The company introduced new policies to combat harassment and unwanted sexual advances on social media site late last year. Twitter said it will immediately and permanently suspend any account that clearly harasses someone or posts nude images without the consent of the subject.
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