Shares of major social media companies, including Meta, experienced a downturn on Thursday, led by Snap (SNAP), following news that President-elect Donald Trump is reportedly exploring options to prevent TikTok from being banned in the U.S. The short-video app, owned by the Chinese company ByteDance, has been under scrutiny for its potential security risks, and a looming January 19 deadline forces TikTok to sell itself to a U.S. company or face a ban if the U.S. Supreme Court upholds a federal ban.
CWEB analysts have closely examined the potential effects of these developments on the social media sector. According to Wedbush analyst Daniel Ives, the U.S. Supreme Court is expected to issue a ruling regarding the app’s future in the next 24 hours. In the meantime, recent reports have revealed that Trump may issue an executive order upon taking office, suspending the TikTok ban-and-sale legislation for 60 to 90 days. This move would allow the incoming administration additional time to consider alternative solutions or negotiate a sale of TikTok.
Retail sentiment surrounding social media stocks remains resilient despite the volatility triggered by these regulatory uncertainties. However, CWEB analysts caution that the social media landscape could face further fluctuations depending on how the TikTok situation evolves. While Snap has seen its shares drop, companies like Twitter and Facebook have also been affected by broader market sentiment.
The potential delay in TikTok’s forced sale or ban provides a brief window for stabilizing social media stocks. However, much depends on the outcome of Trump’s potential executive action and the U.S. Supreme Court ruling. CWEB continues to monitor these developments, with retail investors cautiously observing how they could impact the broader market and the future of social media companies.
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