Meta, Snap Stocks Rise After TikTok Ban Upheld by US Appeals Court: Retail Sentiment Divided
The ban could take effect as early as Jan. 19, 2025, but TikTok plans to appeal the ruling to the U.S. Supreme Court.
FollowShares of Meta Platforms Inc. and Snap Inc. rose over 2% on Friday afternoon after a U.S. appeals court upheld a potential ban on TikTok.
The court rejected a petition from TikTok and its users that claimed the ban, or a forced divestment of the platform by its Chinese parent ByteDance, infringed on free speech rights.
The ban could take effect as early as Jan. 19, 2025, but TikTok plans to appeal the ruling to the U.S. Supreme Court, which could delay its implementation.
The U.S. government has raised concerns for years about TikTok’s data collection practices, while TikTok asserts it has invested billions to secure user data.
The news sparked gains for both Meta and Snap, but retail sentiment diverged.
Meta faced ‘bearish’ levels on Stocktwits, with some users doubting the sustainability of the current rally, with the stock hitting yet another fresh high on Friday.
Some skepticism arose from comments made by President-elect Donald Trump during his campaign, where he hinted at a softer stance on TikTok despite pushing for restrictions in his earlier presidency.
Snap, on the other hand, saw a surge in ‘bullish’ sentiment, with investors optimistic about its ability to capitalize on TikTok’s potential exit from the U.S. market.
TikTok, which has 170 million active users in the U.S., is a major platform for free expression and income generation for many creators.
However, Congress and successive administrations have argued that removing TikTok from Chinese control is essential for national security. If enforced, the ban could shift user engagement and advertising revenue to competitors like Meta’s Instagram Reels and Snap’s Spotlight.
In a separate development, Meta CEO Mark Zuckerberg announced updates to the company’s AI initiatives, unveiling the Llama 3.3 70B text model and plans for a massive 2GW+ data center to support future AI developments.
Meta’s AI products now have nearly 600 million monthly active users, contributing to the company’s record-high stock performance, which has surged 77.29% year to date.
Snap, despite Friday’s rise, remains 85% below its mid-2021 pandemic-era highs.
While Meta’s stock sizzles, speculation about a potential stock split grows, with a Stocktwits poll showing 49% of retail users expecting an announcement by 2025.
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