trending Market Intelligence /marketintelligence/en/news-insights/trending/gt_nun2-4_io-uwbpzp2oa2 content esgSubNav
In This List

Tech giants fall amid congressional grillings; CBS jumps on settlement talks


MediaTalk | Season 2
EP 22 - Warner Bros. Discovery on the Summer Games and the World


Next in Tech | Ep. 176: Challenges in Critical Infrastructure Security


MediaTalk | Season 2
EP 21 - Expectations for the Summer Games: Streaming, Ad Spending, Swimming in the Seine


Next in Tech | Ep. 175: Metaverse Advances

Tech giants fall amid congressional grillings; CBS jumps on settlement talks

Shares in Facebook Inc. and Twitter Inc. plunged for the week ended Sept. 7 as U.S. lawmakers pressed the companies regarding bias and misinformation on their platforms. Meanwhile, CBS Corp. shares jumped amid reports that the media conglomerate is in settlement talks with Shari Redstone's National Amusements Inc. to end their long-standing legal dispute.

Facebook COO Sheryl Sandberg and Twitter CEO Jack Dorsey took to Capitol Hill this week to describe the steps they have taken to combat disinformation on their sites. During a Senate Intelligence Committee hearing Sept. 5, Sandberg said Facebook has added more security reviewers and has developed more advanced machine learning and artificial intelligence capabilities to eliminate abuse. Dorsey added that Twitter has launched various policy changes, such as forming an analytical team to terminate more fake accounts.

Later on Sept. 5, Dorsey testified at a House Energy and Commerce Committee hearing, where he admitted that Twitter must improve some of its business practices, but denied allegations of bias.

Still, the risk of legislative intervention or regulation looms. Sen. Mark Warner, D-Va., outlined a few proposals from his draft policy paper released in July during the hearing, including requiring social media companies to notify users when they have interacted with fake accounts. That same day, The Wall Street Journal reported that Attorney General Jeff Sessions planned to meet with state attorneys general to examine whether social media companies are "stifling" certain viewpoints.

SNL Image

Alphabet Inc.'s Google LLC was represented by an empty seat at the hearing. The committee had requested that Alphabet CEO Larry Page or Google CEO Sundar Pichai testify, but both reportedly declined. A handful of senators scolded the Alphabet executives for refusing to testify, with Warner saying he was "deeply disappointed" that the company was not present to answer "difficult questions" about its business practices.

As of midday Sept. 7, Facebook's stock was trading at $162.51, down 7.5% from its Aug. 31 close. Twitter shares were down 12.6%, trading at $30.74 per share. Alphabet's shares were trading at $1,178.07, down 4.4%. Inc. followed closely behind Apple Inc. to reach a $1 trillion market capitalization this week. The company's shares on Sept. 4 climbed 1.9% in midday trading, hitting the $2,050.27 needed to reach the $1 trillion mark.

Morgan Stanley analyst Brian Nowak said in a research note that Amazon's "rapidly growing, increasingly large, high margin revenue streams (advertising, AWS, subscriptions) will drive higher profitability and continued upward estimate revisions."

Amazon's shares popped after the news, but were trading down slightly for the week by 2.6% to $1,960.73 as of midday Sept. 7.

Netflix Inc. shares also stumbled this week, leading Bespoke Investment Group co-founder and analyst Justin Walters to raise concerns about the stock's 50-day moving average, a metric used to weigh a security's longer-term trend.

"The stock recently attempted to re-take its 50-DMA, but with today's decline, it looks like a failed test," Walters said in a research note, according to a Sept. 5 CNBC report.

Netflix shares were trading at $352.07 around midday Sept. 7, down 4.3% for the week.

In media stocks, CBS Corp. shares soared during the week. The company's majority shareholder National Amusements Inc., led by Shari Redstone, is considering dropping its push for CBS to recombine with Viacom Inc. in exchange for CBS ending an attempt to dilute National Amusements' stake in the company, The Wall Street Journal reported Sept. 5, citing unnamed sources.

A settlement could also include a board shake-up at CBS, but it remained unclear what the implications could be for CBS CEO Les Moonves, who is under investigation amid allegations of sexual misconduct. According to a Sept. 6 report by CNBC, the board is offering $100 million in stock as an exit package to Moonves, though the board could alter the severance package if the allegations against Moonves are proven correct. Moonves will reportedly receive nearly $180 million in severance and a production deal under his current contract.

The Wall Street Journal also reported Sept. 7 that independent directors of CBS' board are evaluating a potential exit plan for Moonves. The company would reportedly bring on COO Joe Ianniello as interim chief executive while the company looks for a permanent replacement.

Around midday Sept. 7, CBS shares were trading at $56.61, up 6.8% for the week.