Sky News says that Twitter Inc (NYSE: TWTR) is planning on following the lead of Facebook Inc ( FB) and Alphabet ( GOOG, GOOGL) by banning cryptocurrency advertisements on its platform. The move may have little impact on Twitter’s bottom line, but it’s one more signal that companies are starting to recognize the danger that cryptocurrencies pose for their customers.
Twitter has not yet officially announced the ban, but sources familiar with the situation say that the ban will be happening in about two weeks. Google and Facebook have already banned all cryptocurrency advertisements due to the lack of regulation and rampant fraud in the cryptocurrency market.
“We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution,” Google’s director of sustainable ads Scott Spencer said of the crypto ban.
[See: 7 of the Best Tech Stocks to Buy for 2018.]
Twitter and other social media platforms seem to have recognized the value of protecting their brands by protecting their users from fraud, abuse and deception. As part of that effort, Twitter has removed more than 1 million fake accounts from its platform this year after special counsel Robert Mueller indicted 13 Russian nationals in February and accused them of using “troll farms” to spread political propaganda on social media during the 2016 U.S. presidential campaign.
Losing cryptocurrency ad revenue likely will not have a meaningful effect on Twitter’s overall business. According to Marketer, Twitter generated the sixth-most online ad revenue of any company in 2017.
After years of disappointing market performance, Twitter has finally given investors reason for optimism in 2018. The stock is already up more than 45 percent year-to-date, and it recently reported its first ever profitable quarter. According to Bank of America, total minutes spent on Twitter’s platform in February were up 49 percent compared to a year ago, making it the fourth straight month of at least 38 percent growth.
Still, CFRA analyst Scott Kessler says Twitter has a long way to go to prove it is on the right track.
“We note persistent questions about growth, in part related to competition and execution,” Kessler says. “After recent notable appreciation, especially after the company reported fourth-quarter results, we see the shares as overvalued.”
[See: 9 Tech ETFs for Growth Investors.]
CFRA has a “sell” rating and $24 price target for TWTR stock.
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Twitter Inc (TWTR) May Be Next to Ban Cryptocurrency Ads originally appeared on usnews.com
