Snap Leads Social Media Sell-Off As Trump Reportedly Explores Options To Keep TikTok: Retail Sentiment Holds Up

Shares of mainstream social media companies took a hit on Thursday as reports suggest President-elect Donald Trump is exploring ways to keep the Chinese short-video app TikTok in the U.S.

In early trading, Meta Platforms, Inc. ($META), which owns Facebook, Instagram, WhatsApp and Threads, fell 0.72% to $612.68, and Snapchat parent Snap, Inc. (SNAP) moved down a steeper 2.91% to $11.41, while Pinterest, Inc. (PINS) rose 0.46% to $30.77. 

Alphabet, Inc. (GOOGL) (GOOG) slipped 0.38% to $194.80.

TikTok, owned by China’s ByeDance, has a Jan. 19 deadline for selling itself to a U.S. entity or face a potential ban, provided the U.S. Supreme Court rules in favor of the federal ban on the app. 

Wedbush analyst Daniel Ives said in a note on Thursday that he expects the apex court ruling in the next 24 hours.

Analysts and industry watchers have opined that a TikTok ban could be positive for U.S. social media companies. Deepwater Asset Management’s Gene Munster said that, in the eventuality of the ban, he expects Meta’s revenue to rise by over 5% by the middle of 2025.

The final tally of a Stocktwits poll regarding which social media will benefit the most from a TikTok ban showed 50% picking Meta’s Instagram and 25% choosing Snapchat. Triller Group, Inc. (ILLR) and Alphabet’s YouTube were mentioned by 12% and 13% of the respondents, respectively. 

Mainstream social media stocks have begun to bake in this possibility. 

However, a Washington Post report said on Wednesday that Trump is considering an executive order once in office that would suspend the TikTok “ban-or-sale” legislation passed by Congress last April for 60 days to 90 days. This would buy the incoming administration time to devise an alternative solution or negotiate a sale.

In a Fox News interview, Trump’s National Security Advisor pick, Mike Waltz, said, “We're going to find a way to preserve it but protect people's data. And that's the deal that will be in front of us.” 

Despite the negative stock reaction, retail investors were largely positive on the social media stocks.

On Stocktwits, sentiment toward Snap stayed ‘bullish’ (70/100), with message volume spiking to ‘extremely high’ levels. 

SNAP sentiment and message volume January 16, 2025, as of 10:-4 am ET | Source: Stocktwits

A retail watcher of the stock raised the possibility of Snap merging with TikTok or buying out the latter.

Another said national security concerns are a compelling reason for Trump to back the federal law.

Meta also elicited an ‘extremely bullish’ reaction (75/100) from retailers, with the positive sentiment accompanied by ‘high’ message volume.

META sentiment and message volume January 16, 2025, as of 10:-4 am ET | Source: Stocktwits

Sentiment toward Pinterest, and Alphabet shares was ‘neutral.'

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