Social media

Trump’s fat-fingered tweets

To say Donald Trump is powerful on Twitter would be an understatement.

Car manufacturer Toyota’s share price plummeted mere minutes after a negative tweet in which the President vowed to stop the firm from moving to Baja California in Mexico, where it already has a plant.

The President tweeted Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax. That short sentence knocked $1.2 billion off Toyota’s market capitalisation.

But it was also untrue. Toyota had first announced plans for a new plant in Mexico in April 2015, but not in Baja. The new plant is to be set up in Guanajuato city. The Baja factory, which opened in 2004, now runs 24 hours a day in three shifts, producing more than 100,000 Tacoma pick up trucks a year.

This is not the first example of the Trump effect. Last December, one of his tweets destroyed $4 billion from Lockheed Martin’s capitalisation, after he complained about the prices of the company’s F-35 fighter jet programme, the most expensive in military history.

Trump’s tweet saw the price of shares fall from $259.53 to $246 – a loss of around $28.6 million per character tweeted.

Ford, Boeing and General Motors have also been victims of Trump’s Twitter finger. In January, Ford announced it had cancelled plans to build a £1.3 billion plant in Mexico, and will instead expand its Michigan operations, partly in response to a ‘more favourable US business environment’, but also because of falling sales of small cars. However, it is retaining an existing plant in Mexico.

However, an endorsement from Trump can likely have a bad effect on companies too, as the chief executive of taxi firm Uber found out. Travis Kalanick was due to be part of the President’s business advisory group but allegedly stepped down after pressure mounted from consumers.

‘Joining the group was not meant to be an endorsement of the President or his agenda but unfortunately it has been misinterpreted to be exactly that,’ said Kalanick in an email to staff acquired by Reuters.

Hundreds of Uber users also deleted their accounts with Uber and a hashtag #DeleteUber trended as Uber drivers continued to pick up passengers from JFK Airport in spite of an anti-Trump taxi driver strike against the President’s travel ban. Uber was accused of taking advantage of the protest, after it announced shortly after the strike commenced that it was still working and had suspended its usual surge pricing, when the fare rises as a result of high demand.

Trump’s tweeting has such an effect on share prices that an app has now been developed which alerts investors when he has tweeted about a public listed company. The Trigger app, which is free to use, enables users to set up notifications for Trump’s tweets, allowing investors to keep a close eye on stocks in real time.

But apart from downloading such apps, it seems companies can do very little to prepare for Trump’s displeasure in the meantime. ‘The immediate nature of Trump’s communications makes any long-term planning or strategising increasingly difficult,’ says Ross Melton, public affairs account executive at Instinctif Partners. ‘Being fleet-of-foot and adaptable is crucial – while never losing sight of the long-term strategic objectives.’

Good luck.

This article first appeared in issue 112