To The Moon

Introduction

TikTok is a Chinese social media app that has become wildly popular in the United States and other countries. The app allows users to create short-form videos and share them with their followers.

However, recent developments have raised questions about the future of TikTok in the United States. The Biden administration has demanded that TikTok's Chinese owners sell their stakes in the video-sharing app or face a possible US ban of the app. This has left many wondering about the potential outcomes for TikTok and the companies that could stand to gain in different scenarios.

In this article, we will explore the three possible scenarios for TikTok and how the companies and competitors mentioned below stand to gain in each scenario. We will also examine whether other companies in Ecommerce will benefit from the news.

Scenario 1: TikTok Spins off Its U.S. Subsidiary

One possible outcome for TikTok is that it could spin off its U.S. subsidiary. This could happen if the Chinese owners of TikTok decide to comply with the demands of the Biden administration and divest their stakes in the company. If this were to happen, it would create a new entity that would be independent of TikTok's Chinese ownership.

In this scenario, several companies stand to gain. The four companies that comes to mind are Meta, Google, Snapchat, and Pinterest who stand to gain directly in the initial phase if TikTok is spun off. The reason for this is that TikTok is a significant competitor to these companies, particularly in the area of short-form video content. TikTok's user base is young and engaged, which makes it an attractive target for advertisers.

META day chart

$Meta Platforms, Inc.(META)$ Facebook's stock is currently near an overbought region with a bearish divergence, which means that it is trading at a high level, but the momentum is starting to weaken. This could make Facebook vulnerable to a decline if TikTok is spun off and becomes a direct competitor.

$Snap Inc(SNAP)$ Snapchat's stock has been on a volatile rising trend, which could continue if TikTok is spun off. Snapchat has been trying to capture the attention of young users who are increasingly using TikTok, and a decline in TikTok's popularity could benefit Snapchat.

$Pinterest, Inc.(PINS)$ Pinterest's stock is currently near a sequential indicator TD9 reversal, which could indicate a trend reversal. If TikTok is spun off, Pinterest could benefit from the increased attention of users who are looking for an alternative to TikTok.

$Alphabet(GOOG)$ Google's YouTube could also gain a lot of ad revenue if TikTok is spun off. YouTube's advertising revenue accounted for approximately 11.35 percent of Google's total revenue in 2022. This could increase if TikTok users migrate to YouTube to consume short-form video content.

Scenario 2: TikTok Sells Itself to an American Company

Another possible outcome for TikTok is that it could sell itself to an American company. This could happen if the Chinese owners of TikTok decide that it is in their best interest to divest their stakes in the company and sell it to an American company. This would mean that ByteDance would no longer have control over the app, and it would be owned and operated by an American entity. This could potentially alleviate some of the concerns regarding national security and data privacy that have been raised by the US government.

If TikTok is sold to an American company, it could be a significant opportunity for the buyer. One of the most likely candidates for the acquisition of TikTok is $Microsoft(MSFT)$ Microsoft, which has already expressed interest in purchasing the app. Microsoft is a major player in the tech industry, with a significant presence in the enterprise market. The company has already acquired LinkedIn, and it could use TikTok to expand its consumer-facing offerings.

Another possible buyer for TikTok is Oracle, which has also expressed interest in the app. Oracle is a leading provider of enterprise software and services, but it has struggled to gain a foothold in the consumer market. Acquiring TikTok could help the company to expand its presence in the consumer space and compete more effectively with rivals like Microsoft and Google.

If TikTok is sold to an American company, it could also be a significant opportunity for the buyer's competitors. For example, if Microsoft were to acquire TikTok, it could potentially integrate the app with its other products and services, such as Xbox and Windows. This could make Microsoft a more significant player in the social media space, and it could pose a threat to competitors like Facebook and Twitter.

Similarly, if Oracle were to acquire TikTok, it could use the app to enhance its existing offerings in the enterprise market. For example, the company could use TikTok to provide more robust collaboration and communication tools for its enterprise customers. This could pose a threat to competitors like Slack and Zoom, which have seen significant growth during the COVID-19 pandemic.

Scenario 3: Face a Possible US Ban of the App

The third possibility for TikTok is that it could face a possible US ban of the app. This would mean that the app would no longer be available for download or use in the United States. This would be a significant blow to TikTok, which has seen explosive growth in the US market in recent years.

If TikTok were to be banned in the US, it could have a significant impact on the app's competitors. For example, if TikTok is no longer available in the US, it could create an opportunity for other social media platforms to gain market share. Instagram, which is owned by Facebook, has a TikTok like feature called Reels. If TikTok were to be banned, Reels could potentially see a significant uptick in usage and downloads.

Similarly, if TikTok were to be banned, it could create an opportunity for other short-form video platforms to gain market share. Triller, which has positioned itself as a TikTok competitor, could potentially see a significant uptick in usage and downloads. Other short-form video platforms, such as Dubsmash and Byte, could also benefit from a ban on TikTok. Another possible beneficiary is Amazon which owned Twitch a video-streaming platform that offers a fun, social way to watch people play games.

Tiktok Shop

TikTok has been rapidly expanding into the e-commerce space, with its popular social media app serving as a platform for brands and influencers to sell products directly to users. Its success has already prompted other social media companies, such as Instagram and Facebook, to also introduce shopping features to their apps. If TikTok is banned or spun off, the existing dominant online shopping platforms like Amazon, Alibaba, and Walmart would likely have less new competition to contend with in the short term.

However, it's worth noting that TikTok's e-commerce efforts are still in the early stages and it remains to be seen how successful they will be in the long term. Additionally, there are other emerging players in the e-commerce space, such as livestreaming shopping platforms, that could potentially challenge the dominance of established players.

Furthermore, if TikTok were to be banned or spun off, it's possible that a new player could enter the market and fill the gap left by TikTok. This new player could potentially be even more disruptive and innovative than TikTok, and could pose a greater threat to established online shopping platforms.

Summary

Each of these scenarios presents opportunities and challenges for TikTok and its competitors. If TikTok spins off its US subsidiary, it could potentially alleviate some of the concerns regarding national security and data privacy, but it could also face challenges in building a sustainable business in the US market. While a ban or spinoff of TikTok may provide some relief to both social media and shopping platforms in the short term, the landscape is constantly evolving and new players are always emerging. Therefore, it's important for these platforms to continue innovating and adapting to stay ahead of the competition, regardless of whether TikTok is present or not.

@CaptainTiger

@MillionaireTiger

@TigerStars