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The effects of controversies on stock prices

A rogue tweet can have a major impact on the market.

Stock prices fluctuate every day and can be particularly volatile when companies make the news. We studied 12 noteworthy public events and controversies to see how a single event—and its impact on public perception—can impact a company’s stock value.

Biggest stock drop: BP (BP) and the oil spill

The most dramatic drop belongs to BP, thanks to its disastrous oil spill in 2010. Stocks in the London-based company dropped by 20%, decreasing its total value by £14 billion. Before the oil spill, BP’s stock price was fluctuating around 650 Great British pence (roughly US$9). In the months that followed, this price decreased steadily, reaching a low of 304.6 GBp (around US$4.22) . Over 2019, the price went back up, hovering between US$36 and US$45 before dropping significantly in 2020 due to the Coronavirus pandemic. (Source: The Guardian)

BP stock prices after oil spill crisis

Biggest stock increase: Weight Watchers (WW) and Oprah Winfrey’s 2018 Golden Globe speech

The biggest rise in our analysis occurred in thanks to Oprah Winfrey, a shareholder and icon of Weight Watchers. Her January 2018 speech at the Golden Globe Awards increased the value of Weight Watchers’ stocks by 14%, from US$46.91 to US$52.62. The stock reached a high of US$104 in July of that year, but has since declined. (Source: CNBC)

Weight Watchers stock price change following Oprah's 2018 Golden Globes speech

Other notable stock price drops

Tesla (TSLA) stocks drop after Elon Musk’s emotional 2018 interview

Event: In August 2018, an interview with Elon Musk caused Tesla stock prices to drop by 9% after he divulged details of his “excruciating” year. (Source: The Express)

Tesla stock price following Elon Musk's emotional interview in 2018

Juventus (JUVE) stocks drop after rape allegations were brought against Cristiano Ronaldo

Event: Cristiano Ronaldo was accused of rape, which he denied. (Source: BBC news)

Juventus stock price change due to Cristiano Ronaldo’s rape allegation

Facebook (FB) stocks drop after it announces revenue growth rate decline

Event: Facebook announced revenue growth rates will continue to decelerate. (Source: The Guardian)

Facebook's stock price change due to the announcement that its revenue growth rate was declining

Facebook (FB) stocks drop due to the Cambridge Analytica data compromise story

Event: Facebook’s stock value plunged after it was revealed that 50 million people may have had data compromised by Cambridge Analytica. (Source: CBS News)

Facebook's stock price change due to the Cambridge Analytics data compromise story

Snapchat (SNAP) stocks drop after Kylie Jenner announces that Snapchat is dead

Event: On February 21, 2018, Kylie Jenner declared that Snapchat was dead. (Source: The Verge)

Snapchat stock price due change to Kylie Jenner's statement that the app is dead

Toyota (TM) stocks prices drop after President Trump tweets

Event: US president Donald Trump 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.” (Source: The Independent)

Toyota's stock price change due to President Trump's tweet

Amazon (AMZN) stocks drop after President Trump tweets

Event: US president Donald Trump tweeted “It is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon. That amounts to billions of dollars.” (Source: Medium)

Amazon's stock price change due to President Trump's tweet

Other notable stock price increases

Apple (AAPL) stocks go up when it becomes the first company in the world to be worth $1 trillion

Event: Apple became the world’s first trillion-dollar company. (Source: The Guardian)

Apple's stock price change due to becoming the first US company to have a $1 trillion valuation

Nike (NKE) stocks go up after its Colin Kaepernick advertisement

Event: Nike shares dropped, then rose higher than before, after Colin Kaepernick became the new face of its “Just Do It” ads. (Source: Markets Insider)

Nike's stock price change due to Colin Kaepernick's advertisement

Apple (AAPL) stocks go up after Carl Icahn tweets

Event: Carl Icahn tweeted “We currently have a large position in APPLE. We believe the company to be extremely undervalued. Spoke to Tim Cook today. More to come.” (Source: Financial Post)

Apple's stock price change due to Carl Icahn's tweet

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Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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