In recent months, Fastly (NYSE:FSLY) has been caught in the tug-of-war between the Trump Administration and TikTok parent ByteDance. The uncertainty regarding the outcome of the dispute has weighed heavily on Fastly's stock, which had shed as much as half of its value. However, with a new administration waiting in the wings, TikTok's fortunes could change, which could be good news for Fastly.
In this Earnings Review that aired on Fool Live on Oct. 30, Fool.com contributors Danny Vena and Jason Hall debate whether a changing of the guard would have any impact on Fastly's future.
Danny Vena: What I would say is there is a widespread belief that President Trump has been the motivation behind much of this and has spearheaded this movement against TikTok and ByteDance. Rather than trying to find a workable solution, basically said, "Hey, we're going to ban TikTok and that's it."
I think that if the presidency changes hands, it may be a good thing for Fastly. I'm not saying it's going to be, I'm saying it's possible and the reason for that is a different administration might have different priorities. They might approach this a little bit differently. They may be more willing to negotiate rather than issue an outright ban. If that's the case, then what you're going to see is you're going to see TikTok is going to put more of its business back on Fastly's services. So yeah, I think it could be a good thing for Fastly.
Jason Hall: My take is it doesn't matter. I think maybe materially, it does benefit the company in the near-term. But right now, I think if you believe in Fastly as a business, if you believe in the thesis, this has created an opportunity for you, this has created an opportunity to buy, to open a position, to add your existing position at a nice discount from where investors value of this company two months ago. To me, that's the big thing that really stands out, is it doesn't matter. It really, truly doesn't matter in the long-term, interest on Fastly as a business, what happens with TikTok? TikTok could disappear overnight and Fastly's path is going to be based on other things. Don't overweight the election or this one customer on Fastly. I think that's really important.