What happened
Shares of Fastly Inc (FSLY +5.67%) fell this afternoon as President Biden's administration said that it would review security concerns about Chinese technology companies. Fastly is based in the U.S., but the company's largest customer is TikTok, which is owned by the Chinese tech company ByteDance.
The tech stock was down by as much as 6.7% today and had fallen 6% as of 3:25 p.m. EST.
So what
Investors hate uncertainty, and right now Fastly's largest customer has a fair amount of it. TikTok's fate in the U.S. has been uncertain ever since former President Trump issued an executive order banning the app. Trump's focus on TikTok was rooted in concerns that TikTok's parent company could potentially share data about Americans with the Chinese government.
Image source: Getty Images.
But Trump's order was successfully fought in court, and the ban never took place. Now that Biden is in office, investors are wondering what might happen to Fastly's most important customer.
Biden's press secretary Jen Psaki said today, "[W]e are comprehensively evaluating the risks to U.S. data including from TikTok and will address them in a decisive and effective fashion."
Now what
Walmart and Oracle were in talks to potentially buy TikTok's American operations, but that deal is uncertain now. Additionally, The Wall Street Journal reported today that ByteDance and U.S. officials are discussing a potential solution that would protect American TikTok users' data from the Chinese government.
With so much drama surrounding TikTok and its parent company, it's no wonder some Fastly investors sold their shares today.
