More than £60billion was wiped off the value of American technology titans last night after US lawmakers declared it was the end of the ‘Wild West’ for social media.
Shares in Twitter, Facebook, Google, Snap, Netflix, Microsoft and Amazon fell as investors fretted about the prospect of tighter regulation.
The sell-off will worry British investors with money tied up in the US tech giants through individual share holdings or funds exposed to the stocks.
Shares in Twitter, Facebook, Google, Snap, Netflix, Microsoft and Amazon fell as investors fretted about the prospect of tighter regulation
The slide in share prices began as Facebook operating chief Sheryl Sandberg and Twitter boss Jack Dorsey were questioned by the Senate Select Committee on Intelligence in Washington about their efforts to tackle election interference.
During the hearing, senators told the executives that Silicon Valley would be unable to tackle meddling by countries such as Iran and Russia alone, with some saying the only answer was tough new laws.
The committee’s Republican chairman, Richard Burr, told them: ‘We’ve learned about how vulnerable social media is to corruption and misuse.
‘The very worst examples of this are absolutely chilling and a threat to our democracy. Unfortunately, what I described as a national security vulnerability… remains unaddressed.
‘Clearly, this problem is not going away.’
Mark Warner, the panel’s top-ranking Democratic senator, told them: ‘Each of you have come a long way with respect to recognising the threat. The bad news, I’m afraid, is that there is a lot of work still to do.
‘And I’m sceptical that ultimately you’ll be able to truly address this challenge on your own. Congress is going to have to take action here.
‘The era of the Wild West in social media is coming to an end.’
Other members of the committee warned that user data held by the firms could become a ‘weapon of choice’ for foreign adversaries.
Responding to the criticism, Sandberg admitted Facebook had been slow to act on interference in the 2016 US presidential election.
But she insisted the firm had since been proactively banning users and removing pages that appeared suspicious.
Meanwhile, Dorsey responded to concerns about misinformation on Twitter and accusations from politicians that the platform censors right-wing views.
He said: ‘Required changes won’t be fast or easy. We’re committing to the people and this committee to do it openly.’
Google had also been invited but declined.
The senate hearing sent Twitter shares down 6.1 per cent and Facebook fell 2.3 per cent.
Netflix dropped 6.2 per cent, Amazon eased 2.2 per cent and Microsoft lost 2.9 per cent.
When the markets closed, more than $80billion – or about £62billion – was wiped off the value of US tech firms.
Tesla’s riding for a fall, says Goldman
Shares in Tesla fell again last night as founder Elon Musk (pictured) was warned that the company is worth just half what he values it at.
The stock dropped by as much as 4 per cent at one point, to $277 – taking losses in the last month to 27 per cent.
The slide came as Goldman Sachs warned the shares should be valued at $210 each –just half the $420 that Musk last month said he was prepared to pay to take the company private.
The warning was particularly galling as Musk had hired Goldman to advise him on buying the firm back, before abandoning the plan.