With a Sunday deadline near, both President Biden and President-elect Donald Trump are considering ways to prevent a TikTok shutdown, according to reports. Stocks that investors see as likely to benefit from a TikTok ban – including Meta Platforms and Snapchat parent Snap – were lower in Thursday trading.
Trump is considering an executive order that would delay enforcement of the TikTok ban-or-sale law by 60 to 90 days, the Washington Post reported Wednesday, citing unnamed sources. The delay would buy the Trump administration time to negotiate a sale or alternative solution to TikTok's ban in the U.S., according to the report.
The Biden administration is also "considering ways to keep TikTok available in the United States," according to NBC News.
Under a law signed by Biden last spring, TikTok's U.S. operations must be sold by its China-based parent company ByteDance before Sunday. Otherwise, the app will be banned. Trump, meanwhile, will be inaugurated on Monday.
The Supreme Court heard arguments late last week from TikTok that the law violated the First Amendment. A decision is expected shortly, with most observers expecting the law to be upheld.
TikTok Ban Deadline Looms
The reported efforts from Biden and Trump mark the latest twist in the TikTok ban saga. The U.S. government and ByteDance have been in a stare down since the bill's passage last year, with ByteDance insisting it will not sell the popular video app.
On Tuesday, however, both the Wall Street Journal and Bloomberg reported that Chinese government officials have discussed the possibility of a TikTok sale to Elon Musk, the tech billionaire and Trump ally who already owns X (formerly Twitter). TikTok denied those reports, however.
Separately, TikTok Chief Executive Shou Chew is attending Trump's inauguration next week, according to the New York Times.
Meta Stock Falls on Potential TikTok Reprieve
The twists and turns have moved some social media stocks that could benefit from TikTok's ban. (Here's a more in-depth look at what stocks analysts expect to benefit – as well as one that could take a hit – with a TikTok ban in the U.S.)
That includes Facebook and Instagram owner Meta. Meta stock lost 1% to close at 611.30 on the stock market today.
Snapchat parent Snap lost 5% to close at 11.23.
Analysts at Wedbush told clients Thursday they expect the Supreme Court to uphold the ban. But TikTok could still get a reprieve, in their view.
"We ultimately believe this ban will be delayed by the Trump Administration looking at a myriad of executive actions that will postpone the ban by up to 90 days until a sale/partnership/ technology resolution can be reached with ByteDance," wrote Wedbush analyst Dan Ives in the client note. "It is also possible the Biden Administration may look to do something in his last days in the White House as pressure is growing from users in the U.S. as the ban date nears."
