Meta Platforms (META) is considering spinning off Reels into a separate app to leverage the uncertainty surrounding Chinese rival TikTok’s future in the U.S. The news was first reported by The Information, citing a person familiar with the matter. The report said that Instagram CEO Adam Mosseri was heard telling his staff about the possibility.
Meta Platforms with its huge Family of Apps (FoA) business, including Facebook, WhatsApp, Insta, and Threads seems to be the biggest beneficiary of a potential TikTok ban in the U.S.
Meta Considers Reels’ Standalone Debut
Meta is seeking to seize TikTok’s massive American user base of roughly 170 million. Remarkably, Reel’s standalone app would be a dedicated short-form video platform that would give users a similar video-scrolling experience to TikTok. Additionally, the independent Reels app could host more video-editing tools for a better user experience.
Notably, Meta launched a new video-editing app in January, called Edits. That launch was also perceived as a step to rival TikTok parent ByteDance’s CapCut app, which performs similar functions. Meta had previously tried to beat TikTok in the short-form video-sharing format in 2018 with the launch of Lasso. However, the app failed to garner much attention, forcing Meta to eventually shut it down.
Meta is actively trying to capture TikTok’s business in the U.S. Earlier this year, Meta tried to lure its content creators by offering lucrative financial incentives. Meta has also benefitted from TikTok’s ban in India in 2020, making Insta Reels one of the most favored video sharing contents in the nation.
TikTok U.S.’ Future Remains Bleak
TikTok’s future in the U.S. hinges on President Donald Trump’s approval of a strategic American investment. TikTok’s U.S. operations have been jeopardized by former President Joe Biden’s law, obstructing its use in the nation. The administration fears that TikTok could be sharing American users’ data with the Chinese military organizations. Thus, it is forcing TikTok to either sell or ban its U.S. operations.
TikTok has until April 5, 2025, to either find a strategic American partner or discontinue its operations in the U.S. completely.
Is META Stock a Good Buy?
Wall Street remains highly bullish about Meta Platforms’ stock trajectory. On TipRanks, META stock commands a Strong Buy consensus rating based on 44 Buys, three Holds, and one Sell rating. The average Meta Platforms price target of $764.61 implies 13.5% upside potential from current levels. Meanwhile, META stock has gained 38.7% in the past year.
