Shares of Fastly (NYSE:FSLY) are rising today as the company's largest customer, TikTok, has so far avoided a nationwide ban that was supposed to take effect today.
The technology stock's share price was up by as much as 7.6% in morning trading and had gained 4.9% as of 11:43 a.m. EST today.
The fate of Fastly's biggest customer has been anything but clear for months now. The Trump administration has been concerned that TikTok, which is owned by China-based ByteDance, poses a national security threat.
As a result, Trump's Committee on Foreign Investment in the United States (CFIUS) set a Nov. 12 deadline, which called for ByteDance to "divest any tangible or intangible assets or property, wherever located, used to enable or support ByteDance's operation of the TikTok application in the United States."
But legal challenges from TikTok and a potential technology deal involving the company, Oracle, and Walmart have made the fate of TikTok murky at best. Even TikTok said recently that it hasn't heard from the Trump administration in weeks.
In late October, a federal judge issued a preliminary injunction to halt the Nov. 12 ban, which is likely why the app is still up and running today.
Some Fastly investors are probably reacting to the fact that TikTok appears to be functioning normally in the U.S. and this, at least for now, means that there shouldn't be any harm to Fastly's business as a result.
Fastly investors should keep in mind that TikTok's fate in the U.S. remains unclear. TikTok may still sell a minority stake to Oracle and Walmart, but the details of that deal are up in the air. Additionally, it's not yet known if President-Elect Joe Biden has the same national security concerns about the app as the Trump administration does. All of which means that Fastly investors should keep an eye on any new developments with this situation.