The U.S. Supreme Court is scheduled to hear arguments on Friday over a bipartisan bill that would ban TikTok on January 19 if it remains under the ownership of its Chinese parent firm, ByteDance Ltd., thus the video-sharing app will be battling for its existence.
Naturally, TikTok’s demise might provide its publicly traded rivals a significant boost.
According to Benchmark analysts, TikTok’s U.S. ad revenue was forecast at $10.1 billion last year and might reach $12.8 billion this year. They estimate that 80% or 90% of the income, which might be up for grabs, would go to Alphabet Inc. (GOOG) (GOOGL) and Meta Platforms Inc. (META), which generated roughly $65 billion and $101 billion in U.S. ad revenue last year, respectively. Facebook and Instagram are owned by Meta, but YouTube and Google are owned by Alphabet.
According to the Benchmark analysts, Snapchat parent company Snap Inc. (SNAP) and Pinterest Inc. (PINS) may receive the remaining 10% or 20% of TikTok’s ad revenue.
Morgan Stanley analysts believe that Meta and Alphabet stand to gain the most if TikTok is shut down or acquired by a business that doesn’t make sure the app succeeds. They claimed to see benefits for Reddit Inc. (RDDT), Pinterest, and Snap as well.
Unless the Supreme Court overturns or otherwise postpones the Protecting Americans from Foreign Adversary Controlled Applications Act deadline, TikTok has stated that it intends to shut down in the United States by January 19. The supreme court, according to TikTok, “will find the TikTok ban unconstitutional so the over 170 million Americans on our platform can continue to exercise their free-speech rights.”
TikTok is a threat to national security, according to proponents of the bill, including Republican Sen. Marco Rubio of Florida, who is President-elect Donald Trump’s choice for Secretary of State. “A platform with enormous power to influence and divide Americans whose parent company ByteDance remains legally required to do the bidding of the Chinese Communist Party,” Rubio and Democratic Sen. Mark Warner of Virginia stated last year in a joint statement about TikTok.
In an attempt to “negotiate a resolution” to preserve the social media platform while addressing national security concerns, Trump urged the Supreme Court two weeks ago to halt a bill that would forbid or require the sale of TikTok the day before he takes office. During his first stint as president, Trump attempted to outlaw TikTok, but he changed his mind last year.
Potential suitors on TikTok
A group led by businessmen Frank McCourt and Kevin O’Leary announced in a statement on Thursday that it has proposed to ByteDance to buy TikTok’s assets in the United States. Identifying itself as “The People’s Bid for TikTok,” the group withheld the amount of its bid.
According to Morgan Stanley analysts, Amazon.com Inc. (AMZN) may find it advantageous to acquire TikTok given the e-commerce behemoth’s “ambitions in social shopping.” They said that Walmart Inc. (WMT) and Oracle Corp. (ORCL), which at one point in 2020 appeared on track to each purchase holdings in the video-sharing app, would show interest in the company again, as well as Microsoft Corp. (MSFT), a previous suitor of TikTok.
Oracle, a significant client of TikTok, issued a warning in June that the company might suffer if TikTok is prohibited in the United States. According to Morgan Stanley, TikTok generates around $370 million in revenue annually for Oracle’s cloud computing division.
TikTok was recently given a 57% chance of being banned in the United States by May by one betting market, Polymarket.
