Perhaps stung by criticism that it has done little to no legislative work, the U.S. House of Representatives is currently laboring to transfer the ownership of -- or ban -- the hotly popular TikTok social media site in the United States.
Clearly encouraged by that effort, on Wednesday market players traded up the stock of its rival Snap (SNAP 3.87%), owner and operator of Snapchat. Snap's shares closed the day 4.7% higher, marking quite a contrast from the 0.6% slump of the S&P 500 index.
A rival could be sold or banned
House Speaker Mike Johnson signaled his intention to advance a measure for ByteDance, the China-based owner of TikTok, to sell TikTok to a third party. Should it fail to do so within one year, TikTok would be banned in the United States. The measure would be included in one or more foreign aid bills soon to be voted upon.
The House is slated to hold a vote on three foreign aid bills, specifically ones for Ukraine, Israel, and several allies in the Indo-Pacific region, this coming Saturday.
At the moment, it's not certain in which bill the TikTok measure might be incorporated.
Bad news is good news, some think
Many lawmakers on both sides of the aisle are eager to push through the foreign-aid bills. President Biden has also indicated his support for them, so it feels that the momentum is gathering in their favor. Given that eagerness, it's likely some form of the TikTok measure will go through.
Will it really help Snap's business, though? I wouldn't be so sure. First, if TikTok is divested, it could end up in the hands of a powerful American company and become even stronger of a rival to the U.S. social media company. Second, the measure is sure to be challenged on legal and even Constitutional grounds, so it might not get very far even if enacted. The bullish reaction to the TikTok developments, then, seems overblown.
