If TikTok Ban Is Approved, These Stocks May Soar

The U.S. House of Representatives approved a bill last week that will directly target TikTok.

The bill earned strong support from both parties (352 for to 65 against), and it essentially demands that the Chinese company ByteDance sell off its US operations to a local buyer. ByteDance developed TikTok, and the popular app operates throughout the world. In China, the app is banned, and a similar but different app Douyin is available for download there.

During Donald Trump’s presidency, Trump attempted to ban TikTok, but his actions were overturned by President Joe Biden when he came to office shortly thereafter.

The current legislation still has to pass approval by the US President and the US Senate. If approved, it would not result in a complete ban of TikTok in the US but would drastically change the app and its ownership locally. The concern is that the app could be used by the Chinese government to spy on citizens and US government officials and influence elections in favor of Chinese interests.

Which Stocks Might Benefit from the Ban?

If ByteDance has to divest its interests in TikTok to a US owner, a few other stocks may benefit directly. A change in ownership may make TikTok less popular or limit its functionality. Stock prices may drop as well, giving direct competitors a chance to take up some of the market share.

Alphabet (GOOG) and its YouTube app are the most likely benefactors of this legislation and the resulting fallout. YouTube is owned by Google, whose parent company is Alphabet, and YouTube has gone head to head with TikTok for years now.

Meta Platforms (META), which owns Facebook, may also benefit. Facebook has been pushing the video content on its platform over the last few years, putting it in direct competition with TikTok. If TikTok starts to lose some of the social media market share, Meta will be there to take up the slack.

Watch these stocks over the next few months as the legislation goes up the line, all the way to President Joe Biden. Even if major changes do not occur on the TikTok platform, the perceived change and loss of value could drive up these other two stocks. Of course, a loss of access to US markets will hurt ByteDance, but the company is not publicly traded.

ABOUT THE AUTHOR See More

Timothy St. John

Financial Writer - European & US Desks

Timothy St John is a seasoned financial analyst and writer, catering to the dynamic landscapes of the US and European markets. Boasting over a decade of extensive freelance writing experience, he has made significant contributions to reputable platforms such as Yahoo!Finance, business.com: Expert Business Advice, Tips, and Resources - Business.com, and numerous others. Timothy's expertise lies in in-depth research and comprehensive coverage of stock and cryptocurrency movements, coupled with a keen understanding of the economic factors influencing currency dynamics. Timothy majored in English at East Tennessee State University, and you can find him on LinkedIn.

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