- Shares of three major insulin makers fall following fake tweet
- Eli Lilly is removing all advertisements from the social media site
There’s nothing like a bit of negative publicity to send a pharmaceutical company’s stock price plummeting. Investors in the sector should normally watch out for disappointing clinical trial results or class action lawsuits. But since last week, they have a new volatility factor to be aware of: the newly emboldened Twitter troll.
On Nov. 10, an account with the username @EliLillyandCo tweeted, “We are thrilled to announce that insulin is now free.” At first glance, there was nothing to suggest it was anything less than an official company announcement – the account came with a picture of Lilly’s logo and Twitter’s blue tick.
Prior to Elon Musk’s takeover of the company, the blue check mark was given to brands, celebrities and journalists to verify their identity and the authenticity of their accounts. Next, Musk introduced a subscription service known as Twitter Blue, which allowed users to purchase a blue tick for just $8 (£6.82) per month. This is exactly how someone managed to create a fake account in the name of Eli Lilly (the company’s real account is the cutesy @lillypad) and convince the markets that one of its most profitable products would now be offered free of charge to patients.
The stunt sent Lilly shares down more than 4%. Other insulin manufacturers Sanofi (FR:SAN) and Novo Nordisk (US: NVO) also saw their stock prices fall by around 4%. Other companies and public figures also saw impostor accounts popping up after the launch of Twitter Blue, though many were more overtly satirical. Like Lilly, defense firm Lockheed Martin (US: LMT) lost billions of its market capitalization after a fake account said it had to stop arms sales to Saudi Arabia, Israel and the United States for human rights reasons.
An impostor posing as Chiquita Brands, the private banana distributor, claimed to have overthrown Brazil’s government – a nod to the company’s predecessor United Fruit’s involvement in a 1954 coup in Guatemala . Following the impersonations, Twitter appears to have removed the $8 blue tick offer.
The whole fiasco seems like a simple lesson in the dangers of online misinformation and the importance of keeping tight control of a company’s brand. However, it should also be noted that Lilly has long been the subject of public criticism over the price of its insulin, with patient advocacy groups accusing the company of price gouging and profiteering. Lockheed Martin has also been at the center of various controversies through its arms sales and lobbying practices. Fake stock market announcements with an agenda aren’t new – Australian authorities even tried to jail an activist who sent a fake stock market announcement on behalf of a bank in 2013 saying it was canceling a loan to a company great tit – but Twitter’s new policy has made that much easier.
Perhaps the real lesson is that companies with controversial ESG records are inevitable targets for the kind of keyboard vigilantes that emerge in lightly moderated public forums. The Australian bank at the center of the coal deception, ANZ (AU:ANZ), announced that it would stop lending to coal companies in 2020, repeating the Jonathan Moylan hoax press release seven years later.
Eli Lilly has now pulled all of its advertising from Twitter, meaning the social media platform stands to lose millions of dollars in much-needed revenue. The pharmaceutical giant’s share price will likely recover – whether Twitter’s legitimacy can do that is another story.
