Without Donald Trump, Twitter could lose almost a fifth of its value.<\/p>\n
That\u2019s the conclusion of Monness Crespi Hardt & Co. analyst James Cakmak, who said that the social media company\u00a0would see as much as $2 billion in market value wiped out if @realDonaldTrump quit tweeting.<\/p>\n
It\u2019s not that the president\u2019s defection would touch off a mass exodus, lowering the number of \u201cmonetizable\u201d daily active users, Cakmak said in an interview. Instead, losing its most prominent user would hit Twitter\u2019s intangible value and lead to what\u2019s known as multiple compression.<\/p>\n
\u201cThere is no better free advertising in the world than the president of the United States,\u201d said Cakmak, who has a neutral rating on Twitter shares.<\/p>\n
While Twitter doesn\u2019t disclose the total number, Cakmak estimates daily users are around 125 million, about 30 percent fewer than Snap.<\/p>\n
Twitter said in July that daily active users rose 12 percent in the second quarter, compared with the same period in 2016.<\/p>\n
Trump has 36 million followers and has tweeted more than 35,000 times since joining the social media service in 2009.<\/p>\n
Twitter\u2019s business doesn\u2019t face much risk from \u201cpotential diminishing political relevancy,\u201d Cakmak said in a note published Thursday.<\/p>\n
\u201cWhat\u2019s most important is the execution of the right strategy, since at the present state we find Twitter not capitalizing on the opportunity that\u2019s in front of them.\u201d<\/p>\n
Twitter shares have fallen 14% since Trump won the presidency in the November 8 election. The company\u2019s market cap is about $11.7 billion, according to data compiled by Bloomberg.<\/p>\n