- Kyle Chua
Snap Stock Sees Gains Amid Potential U.S. Ban of TikTok
The stock market has been high on Snap Inc. as of late as U.S. lawmakers continue to push for a nationwide ban on TikTok.
The parent company of social media app Snapchat saw its shares jump 9.5% on Monday, pushing them above the 200-day moving average for the first time since 2021, according to Bloomberg. Pinterest, another social media service, also saw its shares rise 1.1% on the same day.
Snap's shares haven't been performing as well as they did years ago due to stiffer competition and reduced digital ad spending. The company is down 75% since the end of 2021. Meta Platforms and Pinterest, in comparison, are down 45% and 27%, respectively.
Wall Street analysts believe these companies' stocks could rally if U.S. lawmakers were to proceed with the TikTok ban, though if there was one company that would stand to gain the most from such a move, it would be Alphabet Inc.'s YouTube. Bloomberg Intelligence explains that YouTube's use of an algorithm to recommend content, along with its revenue-sharing model for creators, puts it as the best alternative to TikTok.
Snap's shares soaring comes after U.S. Senate Intelligence Committee Chairman Mark Warner said in a TV interview that he plans to introduce legislation that would give the government more authority to ban apps and services that might pose a risk to American's data security. The legislation would target TikTok, which the U.S. has accused of being a tool for foreign influence campaigns and sharing data with the Chinese government. The allegations come from TikTok being owned by Beijing-based internet giant ByteDance.
The New York Times reports that White House officials are still considering whether to support Warner's legislation, which he plans to introduce on Tuesday. They did, however, provide input on the senators' draft legislation, according to sources with knowledge of the matter. But it remains unclear how the Biden administration might support the legislation if they choose to do so.
Snap Inc. saw its shares jump 9.5% on Monday as U.S. lawmakers continue to push for a nationwide ban on TikTok.
The parent company of Snapchat hasn't been performing as well as it did years ago on Wall Street due to stiffening competition and reduced digital ad spending.
Snap's shares soaring comes after U.S. Senate Intelligence Committee Chairman Mark Warner said in a TV interview that he plans to introduce legislation that would give the government more authority to ban apps and services that might pose a risk to American's data security.