Social Media Stocks Surge as Supreme Court Weighs TikTok Ban
AInvestFriday, Jan 10, 2025 2:11 pm ET
3min read
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SNAP --


Snap Inc. (SNAP) and Meta Platforms Inc. (META) shares surged on Friday as the U.S. Supreme Court heard oral arguments in a case challenging the potential ban of TikTok. The hearing comes amidst growing concerns about TikTok's ties to China and the potential national security risks it poses.



The Supreme Court is set to decide whether to uphold a law that would require China-based ByteDance to sell TikTok's U.S. operations or face a ban. TikTok has argued that the ban would be an "unprecedented censorship" of the more than 170 million Americans who use the app. However, the U.S. government has expressed national security concerns related to data collection through the TikTok app.



If TikTok is banned, it could have significant implications for other social media platforms, with Snap and Meta potentially benefiting the most. Morgan Stanley analysts project that Meta and YouTube would be the "largest beneficiaries" of the $53 billion in TikTok's U.S. ad revenue if TikTok users direct their time elsewhere. Morgan Stanley also expects some of the time spent on TikTok to shift to Snapchat, Reddit, and Pinterest, in addition to Meta and YouTube.

Snap's stock gained over 7% after the Supreme Court hearing on TikTok, signaling support for a potential ban. Meta's stock also rose, reaching another all-time high. Alphabet Inc. (GOOGL), the parent company of YouTube, saw its stock rise around 1% following the hearing.



The potential ban of TikTok could reshape the social media landscape, with Snap and Meta emerging as new competitors in the short-form video space. However, the actual impact will depend on various factors, including user preferences, the availability of alternative platforms, and the effectiveness of marketing efforts by these companies.

In conclusion, the Supreme Court's decision on TikTok could have significant implications for the broader social media landscape, with Snap and Meta potentially benefiting from the shift in user base and advertising dollars. As the hearing continues, investors will be watching closely to see how the court rules and how these companies capitalize on the potential opportunities that arise from a TikTok ban.
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