Impending U.S. TikTok Ban and Impact on Meta Platforms (Forum)
<aside>
🖼️
Overview
- TikTok users spend 2× more time on the app than Instagram, so uncertainty over TikTok’s U.S. future is a tailwind for Instagram engagement and Meta’s ad revenue: Meta Platforms user engagement continues improving
- On January 17, the US Supreme Court upheld (Forum) the law that will ban TikTok in US in Jan.19 unless divested.
- However, Trump has be consistently advocating against the plan since it helped him during the campaign, championing for its sale to US investors instead.
- Trump announced on June 30, 2025 that a buyer for TikTok had been found (Forum).
</aside>
<aside>
💡
Investor Takeaway
- There is high chance that TikTok will be divested instead of being ban in the US. However, the uncertainty surrounding its existence in the US is positive for Meta’s ad revenue. Similarly, if its algorithm will be build from ground up, it may take time for it to be as powerful as before, giving Instagram more time to catch up.
</aside>
<aside>
🔮
Prediction
- The probability of TikTok being banned in the USA is very low, less than 10%.
- The probability of TikTok being divested in the USA is very high, more than 90%.
</aside>
<aside>
💪
Bullish arguments
- TikTok’s algorithm being trained from ground up (Forum) carries high execution risks, which is positive for Instagram.
- Instagram was the main beneficiary of the brief shutdown of TikTok from Jan 18-19, 2025 as its user engagement rose 16% DoD, 2x greater than that of peers (Sensor Tower report)
- China seems to be dragging out talks on TikTok’s sale.
- Leasing TikTok’s algorithm from ByteDance (Forum) is likely to spark lawmaker backlash, adding further political and regulatory uncertainty.
</aside>
<aside>
⚠️
Bearish arguments
- President Trump is determined to save TikTok in the USA, having extended timeline for the ban three times and is actively involved in the talks (Forum).
</aside>