#SocialStocks: House passes bill to ban TikTok

Welcome to “#SocialStocks,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.

TIK TOK BAN GOES TO SENATE: The U.S. House of Representatives has voted to pass a bill that would ban ByteDance’s TikTok app in the U.S. unless the app separates from its Chinese parent, The Verge’s Lauren Feiner reported. The measure, which still needs to get through the Senate, passed in the House with 352 votes, the author said, noting that President Joe Biden said last week he would sign the legislation into law if it passes the Senate.

Earlier in the week, The Wall Street Journal wrote that former Activision CEO Bobby Kotick has approached ByteDance to express interest in buying TikTok and floated the idea of partnering to Sam Altman and others. Microsoft currently owns Activision. Legislation that would ban TikTok in the U.S. or force a sale is moving toward a vote in the House, increasing interest from possible buyers,

LOOKING FOR BUYERS: Former president Donald Trump asked Elon Musk last summer if the latter would be interested in buying Trump’s social network Truth Social and although the idea “went nowhere,” the former president and the billionaire owner have continued to communicate more than was previously known, two people with knowledge of the matter told The Washington Post’s Josh Dawsey, Drew Harwell and Jonathan O’Connell. Trump Media & Technology Group did not address any of the facts reported in the story when invited to do so by The Post, but in an emailed statement, Trump Media spokeswoman Shannon Devine said: “We heard Trump and Musk were actually discussing buying the Washington Post but they decided it had no value.” In the past month, the SEC greenlit Digital World Acquisition Corp.’s (DWAC) merger registration, setting the stage for Trump Media to become a public company, the report noted.

BUY: Cathie Wood’s ARK Investment bought 314K shares of Pinterest (PINS) on Monday.

AI AD CAMPAIGN COMPETITION: Apple (AAPL) has begun testing an AI-powered ad tool for optimizing App Store ad campaigns similar to Google’s (GOOGL) Performance Max and Meta Platforms’ (META) Advantage+, according to Business Insider’s Lara O’Reilly.

UNITED ATLANTIC VENTURES VS. TRUMP MEDIA: Digital World Acquisition Corp., a Delaware corporation, a direct and wholly owned subsidiary of Digital World, and Trump Media & Technology Group Corp., a Delaware corporation, entered into an agreement and plan of merger, dated as of October 20, 2021, pursuant to which, among other transactions, Merger Sub will merge with and into TMTG with TMTG surviving as a wholly owned subsidiary of Digital World. Upon the consummation of the business combination, Digital World will change its name to “Trump Media & Technology Group Corp.” As previously disclosed, on February 28,, United Atlantic Ventures, filed a verified complaint against TMTG in the Court of Chancery of the State of Delaware seeking declaratory and injunctive relief relating to the authorization, issuance and ownership of stock in TMTG, which was amended on March 4, 2024 to add TMTG’s directors as defendants. In addition to its complaint filed on February 28, UAV also filed a motion to expedite proceedings with the court. On March 6, TMTG filed an opposition to UAV’s motion to expedite, and UAV filed its response on March 8, 2024. On March 9, the court held a hearing to decide UAV’s motion to expedite proceedings. During the oral argument by the parties, TMTG advised the court that it would agree that any additional shares of TMTG issued by TMTG prior to or upon the consummation of the business combination would be placed in escrow pending a resolution of the dispute between the parties. Vice chancellor Sam Glasscock acknowledged that if any claims remained after the stockholder vote scheduled to take place on March 22, on the proposed business combination, the court would address those issues expeditiously. However, the court advised that it would not be blocking the stockholder vote, which will proceed as currently scheduled. The court further noted that the parties would contact the court following the stockholder vote. Vice Chancellor Glasscock directed TMTG and UAV to submit a proposed stipulated escrow order by close of business on Wednesday, March 13. Digital World will continue to update its disclosures regarding this matter as circumstances warrant.

NEW NUMBER ONE: Meta’s Instagram overtook TikTok in new app downloads last year, with Instagram’s growth powered by copying TikTok’s success with short-form videos, Eleanor Olcott of The Financial Times noted. In 2023, Instagram’s total app downloads grew 20% to 768M while downloads of TikTok edged up 4% to 733M, the Times said, citing Sensor Tower.

ASP WIND DOWN CONDIRMED: Meta is planning to wind down its authorized sales partner program by July and move to a model where advertisers work directly with the company, The Wall Street Journal’s Ben Glickman reported. A spokesperson for the company confirmed the move.

ANALYST COMMENTARY: Wedbush noted that Meta released a blog detailing the makeup of its two new AI clusters, both of which include 24,576 Nvidia (NVDA) H100 GPUs. The clusters us a Linux Filesystem backed by a version of Meta’s “Tectonic” distributed storage solution and as with servers, this architecture shift “seems to move Meta from third party sourced” Pure Storage (PSTG) to internally designed hardware, the analyst told investors.