♒ If TikTok's banned... who wins?
We analyzed stock market news coverage surrounding TikTok's congressional hearing last week to see who cares, why it matters, and what might be ahead...
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TIKTOK vs. CONGRESS ⚔️
The long & short of it: over half the US population uses TikTok on a monthly basis, and Congress want to ban it nationwide. Kind of a big deal. 👀
Last week things reached a fever pitch, with TikTok’s CEO Shou Zi Chew testifying before a congressional hearing on concerns over data privacy, Chinese influence, and children’s mental health as reasons to erase it from the US; Chew rebutted with claims about the platform’s efforts to keep American data private & users safe.
The whole thing was quite the spectacle — some think it was a small win for US foreign policy, but most say Congress made a fool of themselves. You can watch the whole thing on Youtube here and decide for yourself.
I. THE REACTION 🗣️
This idea of an American TikTok ban has been floating around for a while now. But last week’s congressional hearing made it a ~real~ deal, and the public is taking serious notice. Judging from Google Search volume for ‘TikTok ban’ in the US, intrigue has absolutely skyrocketed over the past month: 🔥
Overall, the bag of reactions for whether or not TikTok should actually be banned in the US has been somewhat mixed; average sentiment expressed in sentences mentioning ‘TikTok ban’ online over the past week has been 42% positive, and 58% negative.
Key Quotes on Twitter:
“A TikTok ban is bound to happen eventually, according to Deepwater's Gene Munster.” ~@UnusualWhales
“If you think the US needs a TikTok ban and not a comprehensive privacy law regulating data brokers, you don’t care about privacy, you just hate that a Chinese company has built a dominant social media platform.” ~@evacide
“TikTok became dominant in the US because no American company was able to build a better product. In the free market, US companies struggled to win so now the government is trying to ban the app due to geopolitical concerns.” ~@APompliano
BUT… there’s a more crucial piece piece of the puzzle here. More important than whether or not TikTok is banned seems to be the *proposed legislation* by which the gov would ostensibly enforce a TikTok ban: the RESTRICT Act
What it says: originally proposed by the Senate on March 7th, the RESTRICT Act would do a lot more than merely ban TikTok; it would also give the Federal Government the power to monitor people’s online activity via routers, streaming apps, and VPN’s, and would enforce criminal penalty for accessing banned content with a minimum of 20 years in prison and a $250k fine. More on this here.
Whew… now of course the Bill has not been passed into law yet, but as you’d expect, the public is going ~bananas~ over it. And rightfully so. Just take a look thru the Twitter search results for ‘Tik Tok ban’ and you’ll see what I mean.
At this point, it’s still too early to say how much of the proposal could ever pass, but one thing’s for sure: the US government is working towards redefining the very nature of online data & privacy law, and whatever happens will certainly have an outsized effect on all of us. More to come…
II. STOCKS TO WATCH 📈
Moving on, another natural question here: which publicly traded stocks are most-likely to be affected by a TikTok ban?
A starting point could be the stocks that are getting talked about most-often alongside ‘TikTok’ in online chatter. So we went back over the past month and took a look, here’s what we found:
Top 10 stocks mentioned most alongside ‘TikTok’ in news:
As we’d expect, the other large social platform companies have gotten a lot of buzz pertaining to this whole TikTok trial — Snapchat, Facebook/Instagram, Google, and Apple (in that order) are all top of mind. Other relevant companies include Oracle (which manages TikTok’s American databases) and Walmart (a major partner of TikTok’s when it comes to sourcing & promoting consumer goods).
Ultimately, a TikTok ban is fastly approaching on the horizon. Whether it actually happens, or TikTok & its owner ByteDance concede to new data privacy & usage terms with the US government… somethin is comin.
The bigger picture: aside from enforcing a TikTok ban, people are egregiously concerned with the legislation proposed in the RESTRICT Act; if passed it would enter the US into an entirely new internet usage paradigm (most people don’t think it looks good)
Lastly, other companies set to be affected by a TikTok ban include major social platforms (Snap, Meta, etc.), as well as TikTok’s current data (Oracle) & retail partners (Walmart)
Anyways… a lot to digest here. There’s plenty more to write about when it comes to TikTok and the US Gonvernment’s proposed policy, and I’m sure we’ll follow up with some more analysis down the road. Personally, at this point I’m not sure what to make of all of it just yet — let me know what you’re thinkin by replying or commenting below.
NEWS NUGGETS 🥔
Other top trending commentary parsed from news
🟢 AMC Entertainment | 📰 TheIntersect | AMC pops +13% on reports that Amazon is considering an acquisition
“Amazon founder Jeff Bezos has dispatched his investment advisors and top entertainment chiefs to explore acquisition plans for embattled theater chain AMC Entertainment, according to multiple senior sources familiar with the discussions.”
🟢 Substack | 📰 Benzinga | Substack launches community funding round on WeFunder
“Susbstack announced today that individuals can invest in the company via Wefunder for as little as $100. The community fundraising round reached $2,623,927 by 3 p.m. EST. Due to the demand, the company extended it to a $5 million maximum, which is quickly filling up.”
🔴 Binance | 📰 Reuters | Crypto exchange Binance sued by CFTC over evading US regulation
“Investors withdrew $1.6 billion of cryptocurrency from crypto exchange Binance since it was sued by the U.S. CFTC on Monday… the CTFC [claims] that they were operating an "illegal" exchange and a "sham" compliance program.”
🔴 Solar Farms | 📰 InsideClimateNews | STUDY: do solar farms lower property values?
“A new study finds that houses within a half-mile of a utility-scale solar farm have resale prices that are, on average, 1.5 percent less than houess that are just a little farther away.”
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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
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