Stocks of social media companies based in the United States of America are witnessing massive surges in their share value as a commissioner from Federal Communications Commission said that the US government should ban TikTok.
Federal Communications Commission is an independent government agency under the federal government of the United States, which is responsible for regulating and implementing laws and rules regarding all forms of communication. Commissioner Brendan Carr who is a Republican Party appointee told Axios that there is no other way but to ban TikTok which is owned by Chinese internet technology giant, ByteDance.
It is important to note that just because the commissioner made such a statement, it does not mean TikTok will surely be banned in the USA. Brendon Carr is only one of the four commissioners in the FCC which is currently dominated by Democratic Party Appointees.
TikTok which is a famous social media app amongst the youth population has been under the scanner of various government across the world for alleged data breaches and privacy concerns. There have also been allegations that the parent company of TikTok, ByteDance, is working closely with the Chinese Communist Party to spy upon American citizens and leak their private data.
Soon after the statement by Commissioner Brendan Carr regarding banning TikTok in the United States, stocks of Meta and Snapchat surged unexpectedly. Shares of Meta Platforms Inc listed on NASDAQ went as high as 97.25 dollars per share. As of 14:33 EDT, shares of Meta are trading at 95.84 USD (+2.88%).
Similarly, the share price of Snapchat, listed on the New York Stock Exchange also surged to 10.61 dollars per share. As of 14:34 EDT, shares of Snap Inc are trading at 10.25 USD (+3.43%). Snap Inc closed the market on Monday at 9.91 US Dollars.
The sudden surge in stock value of Meta Platforms and Snap Inc suggests that investors view the banning of TikTok in the United States as a positive move in the social media and entertainment sector.
The parent company of Facebook, Meta Platforms, and Snapchat is considering TikTok as their competition in the social media market as Meta had publicly admitted that new competition such as TikTok was one major reason the company suffered a decrease in advertisement revenue. The company had also admitted that social media platforms such as Facebook and Instagram owned by Meta were losing young users to TikTok and other new-age platforms.
News reports state that the Committee on Foreign Investment in the U.S. (CFIUS) is currently investigating the threats posed by TikTok and its parent company toward the national security and internal matters of the United States of America. A prominent American news portal reported in September that the Department of Justice is leading negotiations over a security deal.
