TikTok Ban Impact, Meta Stock Surge & Tech Market Insights

Summary

Market Mondays Podcast Summary Episode: TikTok Ban Impact, Meta Stock Surge & Tech Market Insights
Release Date: December 11, 2024
Host: EYL Network

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Introduction

In this episode of Market Mondays, hosted by the EYL Network, Ian Dunlap, a stock market expert, delves into the recent developments surrounding the potential ban of TikTok, the consequent surge in Meta's stock, and broader insights into the tech market. The discussion provides listeners with strategic perspectives on navigating investment opportunities amidst regulatory changes and market shifts.

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TikTok Ban: Possibilities and Implications

The conversation kicks off with an analysis of the ongoing legal battles involving TikTok. A recent appellate court decision mandates that TikTok must either be sold to an American company by January 19th or face a ban.

Business Analyst (00:32):
"The company has to be sold by January 19th to an American company or be banned."

However, the consensus among the panelists is that an outright ban is unlikely in the near term. Market Expert and Tech Consultant echo sentiments that TikTok will likely survive, albeit with possible regulatory amendments.

Business Analyst (01:07):
"I don't see a world where TikTok just disappears into thin air. They'll probably kick the can down the road, get a last-minute amendment of some sort."

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Meta's Stock Surge and Market Position

A significant portion of the discussion centers on Meta (formerly Facebook) experiencing a dramatic surge in its stock value, climbing over 400% in the past two years. The potential removal or scaling back of TikTok presents a lucrative opportunity for Meta to capture a larger market share.

Business Analyst (01:07):
"From a stock standpoint, that is beneficial for Meta. Meta stock's been going crazy even before this news."

On the day of the episode's release, Meta's stock nearly reached a 52-week high, buoyed by speculation that it might inherit TikTok's ad revenue stream and user base if the ban proceeds.

Market Expert (02:16):
"But right there in the waiting will be Google and YouTube for sure. I think Amazon plays a role here from AWS from Cloud."

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Tech Market Insights: Beneficiaries Beyond Meta

The panel identifies several other key players poised to benefit from the potential TikTok ban:

1. Google and YouTube: With TikTok's ad dollars at stake, Google’s platforms like YouTube and YouTube Reels stand to gain significantly.

2. Amazon (AWS): The decommissioning of TikTok would necessitate extensive data migration, increasing demand for cloud services.

3. Snapchat: Positioned as a potential sleeper, Snapchat could capitalize on diverted user engagement and advertising budgets.

Market Expert (02:16):
"If there is a ban, I'm keeping my eye on those for sure."

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Strategic Maneuvers by Meta

Business Analyst highlights Meta CEO Mark Zuckerberg's strategic meeting with former President Donald Trump at Mar-a-Lago. This move is interpreted as Meta's effort to align with the incoming administration, potentially mitigating stringent regulations against social media platforms.

Business Analyst (05:13):
"Zuck trying to cozy up to Trump I think is an effort to try to get ahead of that."

This proactive engagement is seen as a tactical maneuver to ensure Meta's interests are represented amidst a potentially hostile regulatory environment.

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Long-Term Outlook for Meta

Despite the short-term volatility, with potential stock corrections expected in January, the panel remains bullish on Meta's long-term prospects. The company's investments in the Metaverse and robust infrastructure developments position it well for sustained growth.

Tech Consultant (08:55):
"But in two years, yes. Now the other side... In the long term, they're still going to be fine."

Market Expert (09:29):
"They're positioned in a prime place for the next decade, especially from the informational standpoint."

The discussion underscores that while Meta may experience short-term challenges, its foundational assets and strategic initiatives ensure its dominance in the social media and tech infrastructure landscape.

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Infrastructure and Data Control

A crucial aspect emphasized is the importance of data centers and infrastructure in maintaining competitive advantage. Control over data storage and efficient algorithm management is pivotal for social media giants.

Market Expert (07:40):
"The company that is competing with you is playing at a bigger scale... Microsoft doesn't, Amazon doesn't from a social media store, they're not close to it."

Meta's significant investments in data centers across Africa and India are highlighted as strategic moves to control the informational infrastructure, further solidifying its market position.

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Conclusion

This episode of Market Mondays offers a comprehensive analysis of the potential TikTok ban and its ripple effects across the tech industry. With Meta positioned to capitalize on regulatory shifts and infrastructure advancements, the discussion provides valuable insights for investors seeking to navigate the evolving landscape of social media and technology markets. The panel's expert opinions and strategic foresight underscore the importance of adaptability and foresight in investment strategies amidst geopolitical and regulatory changes.

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Notable Quotes

• Business Analyst 00:32:
  "The company has to be sold by January 19th to an American company or be banned."

• Business Analyst 01:07:
  "From a stock standpoint, that is beneficial for Meta. Meta stock's been going crazy even before this news."

• Market Expert 02:16:
  "If there is a ban, I'm keeping my eye on those for sure."

• Business Analyst 05:13:
  "Zuck trying to cozy up to Trump I think is an effort to try to get ahead of that."

• Tech Consultant 08:55:
  "But in two years, yes. Now the other side... In the long term, they're still going to be fine."

• Market Expert 07:40:
  "The company that is competing with you is playing at a bigger scale... Microsoft doesn't, Amazon doesn't from a social media store, they're not close to it."

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This summary captures the essence of the discussion from the Market Mondays podcast episode, providing a detailed overview for those who haven't listened.

Transcript

[Ryan Seacrest]

You made it through all the starts and stops of your tech business. And when you're with Amex Business Platinum, you can count on a network of benefits to keep going, including access to over $1,000 in business and travel value annually. And thanks to five times Membership Rewards points on flights and prepaid hotels booked on amextravel.com you and your plugged in engineers can get rewarded for working in the cloud. That's the powerful backing of American Express. Terms apply. Learn [e-mail] AmExBusiness Tick tock, the band was, was upheld.

[Business Analyst]

We talked about this months ago, I remember. And the judge upheld the appellate court's decision to effectively the. The company has to be sold by January 19th to an American company or be banned. Be banned. So first, you know, I've talked to people in the space. I don't think this is going to happen.

[Market Expert]

I was going to start with the.

[Tech Consultant]

Same thing I've heard.

[Market Expert]

Yeah, yeah. Both were very adamant that it wasn't going to happen.

[Business Analyst]

Yeah, I don't think so.

[Market Expert]

Yeah, go there. Let's start.

[Business Analyst]

I think it's gonna be a variety of different things that can happen. Trump is coming in with a new regime and a lot of his friends are billionaires. So this is an opportunity to make money first and foremost because Tick Tock has a lot of users and they make a lot of money. So I just don't see a world where Tick Tock just disappears in the thin air. They'll probably kick the can down the road, get a last minute amendment of some sort. Amendment to revisit the situation in six months while we sort out how they can, you know, divest the company into an American led. Somebody's gonna end up, it's gonna, it's gonna, I just don't see it being banned. I don't, I don't think that's gonna happen. But it is good for Meta because Meta stock. Absolutely. On Friday, Meta stock went up and almost reached like a 52 week high. Came down a little bit today. But I mean if there's no Tick Tock, then that's the next, that would be the next resort. So from a, from a stock standpoint, that is beneficial for Meta. And Meta has been up over 400% in the last two years. So Meta stock's been going crazy even before this news.

[Market Expert]

Yeah, I think there's a few beneficiaries. It'd be interesting. I think that the date of the bin going into effect is very key here. Right. Like you think of January 19th or what happens two days after that you have the presidential inauguration, right? So I mean that ban could really be lasting for two days if it even comes into place. And so yeah, the presidential election definitely has, is going to have a lot to do with this. But somebody's going to make money, that's the key. Somebody's going to make money. And in the event, like we said, short term we saw Meta go up, but I think there's a few other beneficiaries that we should keep our eye on. The first one being Google with YouTube and YouTube Reels. When you think about ad dollars and the billions of people who are on, on Tick Tock, the ad money that goes into that, if that now is no longer an option, Meta1 is a recipient. But right there in the waiting will be Google and YouTube for sure. I think that's going to be important, but a surprise, one that we need to also keep. I think Amazon plays a role here from an AWS from Cloud, right? So let's say they have 2 billion users, right? That's a lot of data that needs to now be transferred to somewhere else, right. And so now you need cloud service providers that are going to help in that service. And so I would look at the cloud service providers in the event of a band that are now taking on new clients or new clientele to kind of alleviate this process, which is important. And I think Snapchat might be a sleeper too. I know people, I mean, I don't use it, my kids do use it. But those three, right? When you think about social media, you got TikTok, you got Instagram and then you got Snapchat. So in that realm, if there is a band, I'm keeping my eye on those for sure.

[Tech Consultant]

Two important things to note. One great business lesson is to make your platform or software so good that you really have no competitors. I think Meta can do a little bit better job of making it competitive towards Tick Tock. But also Mark made his way down to Mar a Lago and when I saw that this is definitely going to go in Meta's favor one way or another, I don't think everyone I talked to, same as you guys was like, I don't see how Tick Tock can be banned. Like it's. It may be short lived if so. So Tick Tock I think will still be here, but I think in the next four or five years I would love to see Matter take away some of their edge for sure. But Mark going down to me with Trump definitely tells me the stock will be to the moon for the next four or five years.

[Market Expert]

I think from a congressional standpoint it's like the, one of the things that, that they agree on like something needs to happen with the social media platform. The, the influence that has had on our, I should say our community but the entire country, I mean the age demographic, the attention span, all the, all the negative facts that we keep hearing about, I think this is the one thing that they could kind of agree on. Like something needs to happen. We definitely will see.

[Business Analyst]

Well, one thing about the, there's a few things to note. Trump just appoint. I forget that guys he's about to, I don't think he appointed yet but the reason why he went down there is because they're very fearful that there's going to be very anti social media settlement within the administration. One guy in particular, I forget his name but they like what was wrong. I forgot I'll look acts but he's very, he's been very anti social media as far as regulations, laws. So Zuck trying to cozy up to Zuck trying to cozy up to Trump I think is an effort to try to get ahead of that. Yeah. Because they know that it's going to be some difficult times ahead. So it's better to have an ally than a, than a foe. And if you know that you got somebody who's going to be adversary in the cabinet, it would be beneficial for you to at least be able to tell your side of the story and try to get in as much as possible. So that's an intelligent move from him.

[Tech Consultant]

It's a good lesson.

[Business Analyst]

Yes, for sure, for sure. But I also think that, you know, Facebook is one of these companies that just took off and they've been to the moon for 24 months. So you might see a substantial pullback in January. But their long term projection, I, I just don't see how they, their long term projection still has to be dominant because Tick Tock, even if it survives it's, it's not going because the Chinese government, that's the one thing that Republicans and Democrats agree on. Right. Like China has a terrible record on human rights. You know how I feel about China. So we do. If you, if you get all this data and they said that's what they really want to do is buy the algorithm, all these rich guys. Because Tick Tock has the best tech, they have better tech than Meta as far as the algorithm and everything like that. So it's like, you know, the value in Tick Tock is really that algorithm and that's just too valuable to just throw away you, you. It's, it's almost immeasurable how valuable that company is. Not just from a user standpoint, but from an algorithm standpoint. And all of the data that they've already collected, facial recognition, everything. So it'll be interesting to play out, but Meta will definitely be a winner. I don't see how they are a loser, but they might be a short term loser. But long term they have to win in this community even.

[Market Expert]

What you're saying now like, and it goes back to the conversation we had last week when we were talking about the underwater installation of what they're trying to build around Africa, around India. Yeah, it sounds good for Internet, but what really is that the focus of it is the data centers. Right? Like that is the thing. So like if they have storage, if they have algorithms are inside of these facilities, this is where they're being stored at. That's where the information is being disseminated. That's what's feeding you. The person that can control those or has the most, or has the most efficient, the ones that are running at the highest efficiency, the ones don't overheat, the ones that can have the most data that can move, those are going to be the winners. And so the company that is competing with you is playing at a bigger scale. Right. They're looking at it like yes, we have the social media platform but we want to control the energy that provides it as well. So I mean Med is prime position. We talked about the companies that are there with them, but the other ones don't have the social media presence. Right. Microsoft doesn't, Amazon doesn't from a social media store, they're not close to it. They do and now they control the information and the infrastructure. They're prompt, they're primed to, to be if you want to run.

[Business Analyst]

If you see a hundred dollar drop off in Meta stock in January, that's possible.

[Tech Consultant]

Oh yeah, well, but in two years, yes. Now the other side.

[Business Analyst]

Yeah, yeah. On the, on the come up. But yeah, they might fall off.

[Tech Consultant]

I've gone to 887.44 in, in 24 months.

[Business Analyst]

Long term, yeah, but short term they might, they might, they might have some short term pain. For long term they're still going to be fine.

[Tech Consultant]

But they made it through 20225 even going back to long term, I think if with the Metaverse, if they wouldn't have spent it as aggressively in the beginning, they could have made it work. They just got in I think too high of a position and I think they'll, they'll dance back into that metaverse in the next two or three years.

[Market Expert]

Yeah, we're going on probably year four since that was announced. And so like you think about the capex, then that comes off of it. Where's the money going now? We'll see. Yeah, but yeah, I mean they're positioned in a prime place for the next decade, especially from the informational standpoint. And what they're building, the infrastructure that they're building is, I mean it's second to none.

[Tech Consultant]

Now.

[Market Expert]

Shout out to zot.

[Ryan Seacrest]

You made it through all the starts and stops of your tech business. And when you're with Amex Business Platinum, you can count on a network of benefits to keep going, including access to over $1,000 in business and travel value annually. And thanks to five times Membership Rewards points on flights and prepaid hotels booked on amextravel.com you and your plugged in engineers can get rewarded for working in the cloud. That's the powerful backing of American Express. Terms apply. Learn [e-mail] AmExBusiness hey, it is Ryan Seacrest.

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