The stock price for Snap Inc., the parent company of Snapchat, jumped 8.3% on Wednesday morning, while Meta’s share price increased 3.7% as both companies look set to benefit from TikTok’s looming ban from the U.S.
Snap’s Wall Street surge pushed the company to $12.28 per share and a market cap of $20.5 billion. The Santa Monica-based company’s stock price has been on a roller coaster ride to start 2025, but following Wednesday’s early gains, Snap’s stock price is up 9.25% on the year.
Meanwhile Meta, the parent company of Facebook and Instagram, is trading at $616.29 per share and has a market cap of $638.4 billion.
The stock jumps are likely tied to TikTok saying it would shut down its app this coming Sunday if a last-minute deal is not made to keep the app active in the States. ByteDance, The app’s Beijing-based parent company, is facing a Jan. 19 deadline to divest TikTok’s American assets.
TikTok’s decision to shut down the app — which has 170 million monthly American users — goes one step further than the law, signed by President Biden last April, requires. The law bans new downloads from Apple’s App Store and the Google Play app store, and also makes it “unlawful” to update the app. In other words, existing users could keep the app on their phones, but it would never update.
If TikTok turns off, Snapchat and Instagram would likely see a boost in users and usage. YouTube would also presumably benefit, and the stock price of Alphabet, its parent company, is up 2.3% on Wednesday. And Snap, in a timely effort to make it easier for users to find influencers on the platform, launched a “find your favorites on Snapchat” campaign on Wednesday.
The law banning TikTok requires ByteDance to divest its U.S. operations to remain operating in States. The chief concern U.S. lawmakers say they have with TikTok is that it could double as a spyware app for the Chinese communist government; TikTok, per Chinese law, is required to share user data if asked to do so.
In the days leading up to the ban, two Chinese social apps — Xiaohongshu and Lemon8, which is also run by ByteDance — have raced to the top of Apple’s App Store (You can read more about Lemon8 by clicking here).
A potential TikTok ban has been lingering for several years now. Donald Trump first proposed removing the app from the U.S. during his first term in office before Congress ultimately passed the law banning the app last year.
Despite his initial support, President-elect Trump has since changed his tune on banning TikTok, saying last year that he would like to “save” the app. And in December, Trump reiterated he would like to keep TikTok in the U.S. He said he’d “take a look” at saving TikTok, noting he had a “warm spot” in his heart for it because it helped get young people to vote for him.
The Supreme Court is currently weighing TikTok’s plea to overturn the law banning the app, but it does not appear likely before Sunday, when the app’s ban date hits.
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