Snap Inc. SNAP shares are trading lower on Tuesday in response to news surrounding the future of TikTok in the United States. Here’s what you need to know.
What To Know: President-elect Donald Trump is expected to attempt to halt a potential U.S. ban of TikTok next year, following through on his campaign promise to save the popular social media app, according to The Wall Street Journal.
Trump's support could provide relief to TikTok's parent company, ByteDance, as it faces a looming deadline for divesting U.S. assets to meet bipartisan requirements for U.S. security compliance. The current mandate requires ByteDance to transfer TikTok's U.S. operations to an owner outside of China by Jan. 19.
Why It Matters: As Trump prepares to take office, his potential intervention might delay the ban, allowing TikTok to continue operating in its largest market. If TikTok remains in the U.S., it could maintain its influence over a significant user base of approximately 180 million Americans.
A person familiar with the matter reportedly said that ByteDance realized months ago that a Trump victory was the company’s best chance to retain control over its U.S. assets.
“The outcome of the election puts him in an even better place than he was already trending. And that's what the company is hoping for," the person reportedly said.
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Tuesday’s news is being viewed as a negative for TikTok competitors, including Snap, who stand to benefit from a potential TikTok ban as it would mean less competition in the social media space.
SNAP Price Action: Snap shares were down 4.64% at $11.40 at the time of writing, according to Benzinga Pro.
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