To The Moon

Background: Talks of TikTok being banned in the 🇺🇸 have been for a long time but the unresolved geopolitical tensions makes it a real possibility in 2023.

⭐️ The Wall Street Journal, citing unnamed sources, reported that the 🇺🇸 government has asked for Chinese owners of TikTok to sell their stake, or face a possible outright ban of the platform.

⭐️ This ultimatum comes as a bi-partisan bill continues to gain support. If approved, it will introduce new rules for foreign firms deploying their technology on 🇺🇸 soil & provide new powers to the Commerce Department, including the right to ban anything that threatens national security.

‼️ The bill does not directly target TikTok, owned by Chinese firm ByteDance, but is within the crosshairs because of fears that it could harvest data from the 100 million-plus Americans that use the platform.

🕵🏻How Did TikTok Respond To The Possible Ban🔍🔍❓

⭐️ TikTok has long argued against allegations tying it to the Chinese government.

➡️ The platform has said it stores all data on 🇺🇸 users inside the country, that it has never received a request from Beijing for data, & that it would never comply with one that was made - but that has done nothing to allay the concerns in Washington.

⭐️ More recently, TikTok hit back at the prospect of being expelled from the country & said:

➡️ Any “US ban on TikTok is a ban on the export of American culture and values to the billion-plus people who use our service worldwide”

➡️ “If protecting national security is the objective, divestment doesn’t solve the problem: a change in ownership would not impose any new restrictions on data flows or access…The best way to address concerns about national security if with the transparent US-based protection of US user data and systems, with robust third-party monitoring, vetting, and verification, which we are already implementing.”

⚠️ TikTok CEO Shou Zi Chew is due to appear before Congress on 23 March, which is shaping up to be a critical day for the company that could prove highly influential on how politicians view the platform at this crucial ⏰

🧐What Would A 🇺🇸 Ban Mean For TikTok IPO❓

(1) ByteDance has been hoping to take TikTok public through an IPO since 2020, but has yet to do so amid a myriad of headwinds.

⭐️ With headline-grabbing valuations of around $50 billion circling around for TikTok, markets have eagerly awaited for it to go public for years. ByteDance as a whole is thought to be worth considerably more as it owns an array of other platforms, including but not limited to ‘Chinese TikTok’ Douyin, content search app Toutiao, Indian app Helo & collaboration suite Lark🐂🐂🐂

(2) Notably, the Committee on Foreign Investment in the 🇺🇸 said last year that it recommended ByteDance spins-off & separates its 🇺🇸 TikTok arm to address the concerns about where data is stored & who controls it.

‼️ 📰 that it is asking for Chinese owners to sell up leaves the door open to a TikTok spin-off, but a direct sale looks more likely if this were to happen🤔

(3) For now, a ByteDance or TikTok IPO looks very unlikely in this environment.

Notably, any buyer that steps forward to take over the Chinese stakes in TikTok will need to be American.

‼️ Notably, there were talks of a 🇺🇸 company, including Oracle, coming in & acting as a ‘trusted technology provider’ to oversee 🇺🇸 operations of TikTok when Trump was in charge but this idea swiftly collapsed. An array of other businesses, from Microsoft to Alphabet, have been speculated as potential suitors should 🇺🇸 TikTok be put up for sale❣️

🔎🔎What Stocks Would Benefit From The TikTok Ban🕵🏻❓

⭐️ A TikTok ban would provide a huge boost to 🇺🇸 tech companies. TikTok has weighed heavily on the minds of executives at 🇺🇸 rivals for years.

⚠️ As the fastest social media platform to ever reach 1 billion global users, companies like ♾️Meta, Snap & Youtube have been stepping up the fight for user’s attention.

➡️ For example, ♾️ has admitted that TikTok, known for its short-form video model, has reduced engagement on its own platforms & has tweaked its own products, such as the switch to Reels, in direct response to the success of its Chinese rival.

➡️ Over 60% of all digital advertising budgets in the 🇺🇸 funnels through to social media platforms & TikTok has been the fastest-growing player, according to data from Sensor Tower.

‼️ An outright ban would therefore leave a huge hole as advertisers try to reallocate their marketing dollars.

➡️ That means 🇺🇸 social media platforms are poised to benefit. Analysts at Bloomberg Intelligence said:

🥇YouTube, owned by Alphabet might gain the most user market share among social media peers🏆🏆🏆 if TikTok was banned in the 🇺🇸

🥈Meta Reels & other platforms such as Snap & Roblox could also see an engagement boost.

🥉Streaming companies like Netflix & Disney could also benefit. Both giants have launched their own ad-supported tiers, opening up an entirely new way for businesses to reach customers as they cut the cord & move away from linear 📺. Streaming services already account for about 15% of digital marketing budgets and this is likely to grow as the biggest players gain momentum.

🤔💭My Thoughts: I won’t buy the 📰 in this volatile market, but investing in undervalued tech companies (in my definition: below the 52Week Average) that may benefit from the TikTok ban would be a wise investing decision. Of the 5 listed companies only 3 are below the 52Week Average currently. Personally I don’t like to buy companies with P/E that are at a loss, so that leaves me with GOOGL & DIS. Fellow 🐯🐯🐯 which stock are you 🐂-ish for inlight of the possible TikTok ban? 🗳️Vote (mutiple choices allowed) & share your reasons in the comments section❣️

$Invesco QQQ Trust(QQQ)$ $Advanced Micro Devices(AMD)$ 

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