Snapchat and Meta lead social media stocks higher as TikTok CEO gives 'disaster' testimony to Congress
According to Wedbush analyst Dan Ives, Chew failed at his objective of containing those concerns.
"We would characterize today's testimony by TikTok CEO Shou Zi Chew in the Beltway as a 'disaster' moment that will likely catalyze more calls by lawmakers and the White House to look to ban TikTok within the US if the company does not look to spin-off and force a sale from Chinese parent ByteDance," Ives said in a note on Thursday.
Ives said that the testimony included little of the typical grandstanding from members of Congress, and instead was filled with targeted questions on TikTok's business and privacy practices, with bipartisan participation from both Democrats and Republicans."If ByteDance fights against this forced sale, TikTok will likely be banned in the US by late 2023," Ives said.
That would be a boon for social media stocks like Meta and SnapChat, among others, as TikTok has been increasingly gobbling up digital advertising spend from US companies, threatening the earnings results of many of the biggest social media firms.
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