Banning TikTok Would Boost Alphabet

Posted by freeamfva on April 20th, 2023

Banning TikTok Would Boost Alphabet

Alphabet, Meta, and Snap, each of which operate short-form video platforms rivaling TikTok, would all be in line for major stock jumps if the U.S. moves forward with a TikTok shutdown, according to a note to clients Thursday from Bernstein analysts led by Mark Shmulik.To get more news about china alphabet, you can visit shine news official website.

Shares of YouTube Shorts parent Alphabet could jump as much as 20% should TikTok users need to flock to a replacement for their social media fix, shares of Instagram Reels parent Meta could be in line for as much as a 30% gain and shares of Snapchat Spotlight parent Snap could surge as much as 50%, according to Bernstein forecasts, using price-to-earnings multiple data for companies who benefitted from similar previous bans in China and India as a guide.
Those gains would represent 7 billion, 5 billion and billion respective market capitalization increases for Alphabet, Meta and Snap from Wednesday share prices.

The three stocks already benefited Thursday as TikTok’s CEO and China rejected the premise of a forced sale of TikTok by its Chinese parent company ByteDance and TikTok’s CEO testified before Congress to defend his company amid national security and information privacy concerns, with Snap, Meta and Alphabet ticking up between 2% and 3% – a roughly billion jump in market value for the trio.

Snap and Meta would be the “clear beneficiaries” of a TikTok ban, Wedbush analyst Dan Ives wrote in a Wednesday note, also predicting such a ban would have wide-ranging effects across the technology sector, “significantly increas[ing] US/China tensions with the brewing Cold Tech War playing out across the software and chip ecosystem.”
The Biden Administration has demanded ByteDance must sell TikTok or the app will face a possible nationwide ban, according to reports last week. TikTok has drawn scrutiny due to fears the Chinese government could access data collected by the increasingly popular app. Forbes investigations in recent months revealed ByteDance used TikTok to spy on American citizens, including Forbes reporters, actions now under probe by the FBI and Justice Department. India banned TikTok in June 2020 to “ensure safety and sovereignty of Indian cyberspace,” citing data privacy concerns for private citizens. The U.S. barred TikTok from being downloaded on government-issued devices last month. Fighting against legislation in Congress that would give the Biden Administration the power to ban certain foreign-owned technology, TikTok insists U.S. data has never been shared with the Chinese government, and has promised to store U.S. users’ data in American servers.