Shares of the social media giant Twitter saw a 6 percent decline in value Wednesday, the same day the company’s CEO Jack Dorsey testified before the Senate Intelligence Committee regarding election meddling during the 2016 presidential race.
Dorsey appeared with Sheryl Sandberg, Facebook’s Chief Operating Offer, during the hearing. According to a report from CNBC, the hearing is designed to investigate any “meddling and abuse” on social media platforms and how the companies plan to combat malignant users.
“Abuse, harassment, troll armies, propaganda through bots and human coordination, misinformation campaigns, and divisive filter bubbles – that‘s not a healthy public square,” Dorsey said during his opening remarks, according to The Guardian. “We acknowledge the real-world negative consequences of what happened, and we take full responsibility to fix it,” he added.
Social media platforms like Twitter and Facebook have also been accused of harboring an anti-conservative bias. Some prominent Republicans have accused Twitter of “shadow banning” conservative voices. President Donald Trump addressed these allegations in July in a tweet.
“We will look into this discriminatory and illegal practice at once! Many complaints,” he said.
Despite the president’s comments, Dorsey continues to deny the allegations.
“We believe strongly in being impartial, and we strive to enforce our rules impartially,” he said while reading his prepared statement during the hearing. “In fact, from a simple business perspective and to serve the public conversation, Twitter is incentivized to keep all voices on the platform.”
Despite his best effort, Twitter’s stock price remained down throughout the day. Shares of both Google and Facebook were down as well. Although Google was invited to testify, the tech juggernaut declined to participate, a move that angered some of the committee members.
“I’m deeply disappointed that Google – one of the most influential digital platforms in the world – chose not to send its own top corporate leadership to engage this committee,” said vice chairman of the Senate Intelligence Committee Senator Mark Warner. “Given its size and influence, I would have thought the leadership at Google would want to demonstrate how seriously it takes these challenges and to actually take a leadership role in this important public discussion.”
As a result of the social media sell-off, both the Nasdaq composite and S&P 500 fell throughout the day, driving a decline of tech-related stocks across the market. Both Amazon and Microsoft saw their shares fall by more than 1 percent Wednesday, and Netflix declined by almost 4 percent.
“When you have these corporate executives dragged to Congress that makes the market more nervous,” said SlateStone Wealth chief investment strategist Robert Pavlik during an interview with CNBC.
Pavlik also speculated that the hearings could lead to more regulations governing social media platforms, which is also making investors nervous.
“The threat of tech being the target of regulation is real,” said Bryn Mawr Trust’s CIO Ernie Cecilia while speaking to CNBC. “But we have had a pretty good run up in tech. I think what you’re getting here is a rotation out of tech and into some of the other names that have lagged.”
The Dow Jones industrial average was spared from decline and traded 28 points higher than the previous day’s close. Investors across all markets are expected to remain somewhat cautious until the United States and Canada reach a consensus regarding the North American Free trade Agreement (NAFTA). The U.S. and Mexico reached an understanding last week; however, negotiations with Canada are still ongoing