Facebook (FB) CEO Mark Zuckerberg and President Trump have had a call that was described by both sides as productive, according to Axios. The news comes after Twitter (TWTR) appended to the President’s tweet a warning “tag” that urged users to “get the facts about mail-in ballots.”
In response, President Trump signed an executive order against online censorship across social media, writing “When large, powerful social media companies censor opinions with which they disagree, they exercise a dangerous power.” He is now threatening lawsuits by the Federal Trade Commission against social media companies deemed to be abusing their protections (as platforms for speech, rather than speakers per se) under Section 230 of the federal Communications Decency Act.
“I’ve been struggling with how to respond to the President’s tweets and posts all day. Personally, I have a visceral negative reaction to this kind of divisive and inflammatory rhetoric. … But I’m responsible for reacting not just in my personal capacity but as the leader of an institution committed to free expression” Zuckerberg posted on Facebook on Friday.
The billionaire struck a more diplomatic tone than Twitter as he continued: “I disagree strongly with how the President spoke about this, but I believe people should be able to see this for themselves, because ultimately accountability for those in positions of power can only happen when their speech is scrutinized out in the open.”
Nonetheless, FB retains a Strong Buy analyst consensus, with shares up 10% year-to-date. Meanwhile the average analyst price target of $243 indicates further upside potential of 9%. (See Facebook stock analysis on TipRanks).
Encouragingly, five-star Merrill Lynch analyst Justin Post is staying onside, despite the recent political tension. He told investors: “Overall, we see dispute as a negative for social media given potential for increased media scrutiny on social media and Internet technology companies entering the 2020 elections, and for content policies to potentially alienate one or both political parties.”
However the analyst added, “we also anticipate an uptick in social media usage around the elections, and would expect company content policies to adjust to legislative direction, which Facebook has welcomed in recent years. Maintain Buy on Facebook and Twitter”.
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