Social media stocks have had a rough time lately. Monetization seems ever harder to find, and for some, relevance is slipping away as well. One platform, perhaps the most popular—TikTok–is facing serious troubles from government regulators. That trouble is sufficient to drive up TikTok’s biggest competitors, from Meta (NASDAQ:META) to Snap (NASDAQ:SNAP).
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TikTok likely won’t be sharing much about this news. A bipartisan team in the House of Representatives aims to completely ban TikTok’s operation in the United States. The team also has the support of Senator Marco Rubio. Rubio currently holds the leading Republican seat on the Senate Intelligence Committee.
The legislation isn’t really a ban on TikTok, though; the legislation calls to “block and prohibit all transactions” from certain social media operations. Those operations include any social media that is either based in a country that is a foreign adversary to the United States or a social media outlet in a country under the “substantial influence” of one of those countries. TikTok is specifically mentioned in the legislation. However, it’s only part of a larger list that may have more names later.
Meta looks like it’s in a better position to take advantage of this move. Currently, the company has a Moderate Buy consensus rating with upside potential of 22.64% thanks to its average price target of $147.24 per share. Meanwhile, Snap has a Hold consensus rating with 8.21% upside potential by way of its $10.28 per share price target.
