Congress Moves To Ban TikTok: Could Members Benefit From Positions In Social Media Stocks Like Meta Platforms?

ByDharmendra Kumar

News of the potential sale or U.S. ban could have a huge impact on content creators and could also see rival social media platforms benefit.

What Happened: The House of Representatives voted in favor of a bill that will force TikTok parent to divest its holding in the social media company or face a ban in the U.S.

The bill now faces a vote in the Senate and if passed would head to President Joe Biden to be signed.

The bill would give ByteDance five months to divest the company or face a U.S. ban. The ban could see the app removed from mobile app stores from Apple Inc (NASDAQ:AAPL) and Alphabet Inc (NASDAQ:GOOG)(NASDAQ:GOOGL).

Those who have already downloaded TikTok may still be able to use the app, but wouldn’t be able to download updates or keep the app when buying new phones.

While it remains to be seen if the bill passes the Senate, a likely ByteDance appeal could delay the process. Depending on how everything plays out and whether another company buys TikTok, several social media rivals could stand to benefit from a ban or worry of a ban by the more the estimated 150 million U.S. TikTok users.

Companies like Meta Platforms (NASDAQ:META), which owns Instagram and Facebook, Alphabet’s YouTube and Snap Inc (NYSE:SNAP) could benefit from the concerns over TikTok.

As reported by Benzinga last year, several members of Congress own stock in the social media companies mentioned above, which could prove to be a conflict of interest as they vote on the potential ban.

Related Link: 10 Best Stock Traders In Congress In 2023 (Spoiler: Nancy Pelosi Has Reentered The Chat)

Why It’s Important: According to Quiver Quant, which tracks the trading activity of members of Congress, 16 U.S. representatives currently

Meta Platforms stock.
Of those 16 Congress members, 15 voted in favor of the bill to ban TikTok and one did not vote.

Several members of Congress have sold their positions or portions of their stakes in Meta Platforms in 2024, which comes as a potential ban has been talked about for years.

The recent buying activity tracked by Quiver Quant shows that Senator Markwayne Mullin (R-Okla.) bought $15,000 to $50,000 worth of META shares in January. Representative Jared Moskowitz (D-Fla.) bought $2,000 to $30,000 worth of META shares in December 2023.

Mullin took to Twitter Thursday to share his thoughts on the ban.

“The Chinese Community Party uses TikTok as a propaganda machine to steal user data and undermine America. While this bill is a step in the right direction, more needs to be done to end the #CCP’s malign influence on our nation’s youth,” Mullin

.
It will be interesting to see if any members of Congress have bought Meta shares or another social media company over the last month. Trades have to be disclosed within 45 days of the transaction.

A 2023 poll of Benzinga social media users asked “If TikTok is banned, which platform will you use more?”

The results were:

Instagram: 38.3%
Twitter: 26.3%
Snapchat: 20.6%
Facebook: 14.8%
With ownership of both Facebook and Instagram, Meta Platforms could be the runaway winner of the potential ban of TikTok.

While a ban could take months, content creators who have built a following on TikTok might start testing other platforms or focusing more on rival platforms to help offset any potential loss of income from TikTok. Investors will closely monitor user metrics for Meta Platforms, YouTube and Snap in coming quarterly reports.

 

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The embattled Republican candidate’s grievance centered on a January ruling that awarded $83.3 million to Carroll, who says Trump raped her in the 1990s. The subsequent appeal by Trump’s legal team required posting a substantial $91.6 million bond to halt Carroll’s compensation during the appeals process. Trump vehemently refuted Carroll’s accusations as “false” and criticized the legal system for penalizing him for denying them. “Sometimes, it’s not good to be rich. I just posted a $91 million bond on a fake story. Totally made up story. Think of it, 91 million. I could say things about what it would cost normally. Ninety-one million, based on false accusations made about me by a woman that I knew nothing about,” he said. “Didn’t know, never heard of. I know nothing about her. She wrote a book, she said things. And when I denied it, I said, ‘It’s so crazy. It’s false.’ I got sued for defamation. That’s where it starts.” Also Read: Millions Of Americans Are Considering A Mass Exodus If Donald Trump Wins Again, Says Report The former president also said that Carroll “is not a believable person” and that U.S. District Judge Lewis Kaplan — who oversaw the defamation trial and whom Trump called “a terrible person, a terrible judge” and “highly corrupt” — knows as much. Trump obtained the $91.6 million bond from insurer Chubb Ltd (NYSE: CB), signing the surety bond with Chubb’s Federal Insurance Co. last week. It delays immediate payment to Carroll but ensures compensation if Trump loses the appeal or doesn’t settle the debt. According to a report by the Insurance Journal, Chubb said that “these bonds are an ordinary and important part of the American justice system, protecting the rights of both defendants and plaintiffs.” “For defendants, appeal bonds ensure the opportunity to exercise the right to appeal an adverse judgement, which might otherwise be lost in the absence of a bond,” the company added in a statement shared with the Insurance Journal. Last year, Trump was found liable for sexually abusing Carroll and was ordered to pay her $5 million in damages. This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo: Shutterstock

ByDharmendra Kumar

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