Wedbush's Dan Ives highlights the significant consequences a TikTok ban could have on major tech companies like Meta (NASDAQ: META) and Snap (NYSE: SNAP).
What Happened: On Wednesday, Ives shared insights on CNBC's Squawk on the Street about the potential repercussions of a TikTok ban for large technology firms. Ives described the situation as a "slippery slope" and a "watershed moment," suggesting that imposing a ban is akin to "playing a little with fire."
When asked if Wedbush would rerate Meta and Snap higher, Ives explained that passing the bill in the House would be "incrementally positive" for other social media giants, but there is a need to wait and watch for the coming weeks.
His comments come as the U.S. House of Representatives passed a bill that could lead to a ban on TikTok if its Chinese owners do not sell the app.
@Wedbush's @DivesTech breaks down the greater implications a TikTok ban on the table has for big tech companies like $META and $SNAP.
"We believe this is a slippery slope, it's a watershed moment, you are playing a little with fire going down this route." pic.twitter.com/aH96FZwrB2- Squawk on the Street (@SquawkStreet) March 13, 2024
Why It Matters: The House recently approved a bill that, if enacted, would compel TikTok's parent company, ByteDance, to divest the app or face a ban, impacting around 150 million U.S. users. This development has put social media influencers and companies on high alert, considering the app's vast American user base. TikTok's future in the U.S. is now uncertain as the bill moves to the Senate.
Gene Munster of Deepwater Asset Management echoed former President Donald Trump's sentiments on the matter, suggesting that the ban could be a "small amount of good news" for Zuckerberg's Meta Platforms. Munster highlighted the bill's progression but noted the uncertain outcome as it heads to the Senate, where a corresponding bill is currently absent.
Elon Musk also expressed his concerns about the potential for increased internet censorship following the proposed TikTok ban. Musk engaged with a social media post that suggested the bill could lead to "Complete internet censorship and Government control," calling the situation a "serious concern."