TikTok ban in US; News worth $431bn for Alphabet, Meta and Snap
The three US tech giants will witness a stock surge as Americans scramble to find platform alternatives to fulfill desired needs.
The banning of TikTok in the US could leave a market worth around $431 billion to be tapped by three American tech giants as Washington's pressure mounts over the social media app, a Bernstein report revealed on Thursday, according to a report by Forbes.
Bernstein, a wall street private wealth management company, informed its clients that prohibiting ByteDance's TikTok in the country will skyrocket the stock prices of Alphabet, Meta, and Snap, as social media users will scramble to find another platform to fill their needs. “Who wins? Everyone,” Bernstein said its note referring to the three American corps.
Read more: TikTok seeks to ease European concerns over data security issues
According to the financial institute, shares of YouTube's parent Alphabet could soar up to 20% accounting for almost $267 billion in market value, while Meta's Instagram share could increase by around 30% at $155 billion and Snap's by up to 50% representing a $9 billion market gain.
Earlier this week, the shares of the tech trio jumped between 2% and 3% - almost $40 billion between them - as TikTok fought against US pressure to sell the platform and distance itself from its current owner, Chinese tech giant ByteDance. TikTok's CEO also testified before Congress to refute the US' allegations of how the platform handles data of American users and the Chinese government's access to these data.
Shou Zik Chew, TikTok CEO, faced relentless questioning from US lawmakers who plan to ban the video-sharing platform in the United States claiming that it gathers user data and transfers them to the Chinese government; the US speaks of the alleged ties between China and how it poses danger to teens. "ByteDance is not owned or controlled by the Chinese government and is a private company," Chew told lawmakers.
"We believe what's needed are clear transparent rules that apply broadly to all tech companies -- ownership is not at the core of addressing these concerns," he added.
Investment firm Wedbush said on Wednesday that Meta and Snap are the “clear beneficiaries” of a TikTok shutdown, also adding that the ban will result in a ripple effect across the tech industry, “significantly increas[ing] US/China tensions with the brewing Cold Tech War playing out across the software and chip ecosystem.”
Read more: US Federal agencies have 30 days to put TikTok ban into effect
Many have questioned #Washington's obsession with the issue, saying that the policy is aimed at distracting the public. pic.twitter.com/nLj0oTjy0W— Al Mayadeen English (@MayadeenEnglish) March 1, 2023
- No evidence just accusations -
China reiterated on Friday that it does not ask companies to hand over information gathered overseas, as Chinese-owned Tiktok faces a potential nationwide ban in the United States.
China "has never and will not require companies or individuals to collect or provide data located in a foreign country, in a way that violates local law," Foreign Ministry Spokesperson Mao Ning told a regular briefing. The Chinese government "attaches great importance to protecting data privacy."
"The US government has so far not provided any evidence that TikTok poses a threat to its national security, but instead has repeatedly made presumptions of guilt and unreasonable suppression" against the company, Mao added.
A US newspaper claimed earlier that the sale of ByteDance was put through by the Biden administration’s Committee on Foreign Investment in the US (CFIUS) - a multi-agency federal task force responsible for national security risks in cross-border investments.
In response, TikTok spokesperson Brooke Oberwetter released a statement that a coerced sale would exacerbate the tensions regarding the deemed security risk and vowed to invest $1.5 billion in a program intended to protect American user data from access by the Chinese government.
Beijing has categorically rejected western accusations of potential cyber-attacks on government devices.
According to the Chinese Foreign Ministry, the US has overstretched the concept of national security and abused state power to quash foreign businesses.
On March 1, the White House provided federal agencies a period of 30 days to remove TikTok on all federal devices. In response to the move, Chinese Foreign Ministry Spokesperson Mao Ning on Tuesday said, "We firmly oppose those wrong actions."
The big picture
In December 2022, following "concerns" from the FBI director and cybersecurity experts that China may exploit the social media platform, TikTok, for allegedly spying on US citizens, Senator Marco Rubio, the top Republican on the Senate Intelligence Committee, and a bipartisan pair of congressmen in the House proposed a bill that would prohibit TikTok in the United States.
The bill, according to the statement, would "protect Americans by blocking and prohibiting all transactions from any social media company in, or under the influence of, China, Russia, and several other foreign countries of concern." The bill will also explicitly designate TikTok and its parent company, ByteDance, as social media firms for the purposes of the legislation.
The US actions contrast with the protracted discussions that TikTok has had with the US government for years over a potential agreement that may enable the company to handle national security issues and to continue providing services to US consumers.
Read more: European Parliament to ban TikTok from staff phone devices - reports