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Twitter's (TWTR) Prominent Accounts Hacked, Shares Fall

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Reportedly, Twitter Inc TWTR was in for a rude shock after some of its high profile accounts were hacked and used to post tweets in favor of Turkish President Recep Tayyip Erdogan. Shares went down nearly 2% to $15.03 yesterday.

Per reports, the accounts were not hacked from the main platform but from Twitter Counter, an Amsterdam based third party statistics service for Twitter. Some of the prominent accounts hacked included pop sensation Justin Bieber’s Japan account, BBC North America, Reuters Japan, Forbes, UNICEF, Duke University, Amnesty International and Starbucks Argentina. Tweets filled with swastika (Nazi symbol) and hashtags like “NaziGermany” and “NaziHolland” were sent from these compromised accounts.

Currently, it is uncertain as to who carried out this mass hacking.

Turkey/Netherlands Face-off

Per media reports, Turkey and Netherlands are embroiled in a political spat ever since the latter barred Turkish ministers from attending a political rally in the country ahead of a referendum in Turkey. The rally was organized to gain support for Erdogan. Turkey is drawing up a new constitution that will significantly enhance the President’s power and make the post of prime minister and vice president redundant. The referendum is scheduled to take place on Apr 16.

Following the treatment meted out to its ministers, Turkey has “suspended high level ties” with Netherlands as well as barred the Dutch ambassador from returning to Ankara. It has also labeled Dutch action as “Nazi tactics”.

Twitter’s Trolling Trouble & More

Analysts observe that this incident is unlikely to cause much damage to Twitter but the increase in these types of occurrences (hacking, fake news & hate speech) can prove detrimental.  Social media sites have come under tremendous scrutiny following the U.S presidential elections in 2016. Facebook FB and Twitter were accused of disseminating fake news resulting in surprising election results.

Rising concerns have also come from Germany as the Social Democrat Party, reportedly, said it will fine social media companies 50 million euros ($53 million) for their inability to contain a hoax.  Since the beginning of the year, German intelligence agencies have been on their toes as there are chances that fake news will alter election results. Reportedly, Buzzfeed has found that there are several fake reports on Facebook about Angela Merkel, who is campaigning for the fourth term as the chancellor.

Twitter has been trying to contain the trolling menace that has plagued its platform for long now and possibly kept potential users as well as buyers at bay.

Apart from taking down accounts of offenders, Twitter also announced several measures to combat trolling. The company has improvised the “mute” button, which will enable users to block tweets that include objectionable words, phrases and conversations. Plus, it has empowered users by giving them a “more direct way of reporting” hateful conduct. Twitter users can now report any hateful conduct that they come across on the platform. Per Twitter, this “helps reduce the burden on the person experiencing the abuse, and helps to strengthen a culture of collective support on Twitter.” The company said that it is also “retraining” its staff to better tackle abusive behavior on the platform.

Twitter cannot afford more troubles as it passes through one of the toughest phases in its corporate history. User growth is sluggish and advertising revenues are decelerating. Amid this entire fracas, the exodus of high profile executives continues. In the past one year, Twitter shares declined 10.18%, as against 8.57% rise in the Zacks Internet Software industry. Its CEO, Jack Dorsey’s focus on “live” and user friendly changes hasn’t yet moved the needle for Twitter.

To top it, the widely expected takeover didn’t materialize, with interested parties like Alphabet (GOOGL - Free Report) , Salesforce and The Walt Disney Company DIS pulling out last minute, given the challenges that Twitter faces alongside trolling.

At present, Twitter carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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