A federal appeals court declined to block the law passed by Congress and signed by President Biden that would ban TikTok in the US if Chinese parent company ByteDance fails to divest and sell the social media platform by January 19, 2025.
Roth Capital Partners managing director and senior research analyst Rohit Kulkarni tells Morning Brief hosts Seana Smith and Madison Mills that other social media platforms would naturally benefit from the elimination of TikTok, which says it has 170 million monthly active US users.
“I would expect shares in Snap (SNAP) to rise the most and then shares in Meta (META) to rise as well. But having said that, what happens in January and what happens to TikTok stands as far as appeals and the next steps in the legal process, that remains to be seen,” Kulkarni says. “That’s what further complicates the scenarios, and whether Trump and [Elon] Musk together, how they work with TikTok in the future.”
Musk is the owner of X, the social media site formerly known as Twitter.
In addition to the new administration set to take power in January, ByteDance is expected to appeal this decision, which could head all the way to the Supreme Court.
“In my opinion, there is a scenario that TikTok would still be around come [February 1], working alive and well in the US So there is a that could again reverse some of the gains in the social media stocks that we might see when it comes to just this back and forth and uncertainty,” Kulkarni says.
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This post was written by Kayla Hawkins.
