Snap Shares Will Soar If TikTok Leaves US

By Douglas A. McIntyre Published Aug 30, 7:10AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Snap Shares Will Soar If TikTok Leaves US — © stockcam / Getty Images

24/7 Wall St. Insights

TikTok is still on track to disappear in the United States in the coming year.
Snap Inc. (NYSE: SNAP | SNAP Price Prediction) stock could get a boost if even a modest number of users switch to Snapchat.
Also: Discover the Next Nvidia.

Snap Inc. (NYSE: SNAP), perhaps the most beaten-down social media stock traded on any U.S. stock exchange, could have the best run ever if the government pushes TikTok out of the market because of its possible affiliation with the Chinese government.

President Biden signed a law just over two months ago that stipulated TikTok would have to be sold or closed in the United States within a year. Court challenges that go beyond the middle of 2025 could extend that period. However, an essential barrier to TikTok’s ability to operate as a Chinese-owned company exists.

TikTok does not disclose its user figures. Estimates put it at just above a billion, making it half the size of Facebook. Yet, those are global numbers and don’t measure its reach in the United States. Snap’s comparable figure is about 400 million.

It is only possible to guess how many TikTok users would move to Facebook, Instagram, and Snapchat if TikTok were unavailable. However, if even a modest number moved to Snapchat, it could save Snap’s shareholders from years of disappointment.

In its most recent quarter, Snap’s revenue was $1.24 billion, up 16% from the year earlier. It lost $248 million, an improvement from a loss of $337 million the year before. Revenue estimates see it rising no more than 16% in the current quarter.

The poor quarterly results pushed Snap’s share price down sharply. It is off 43% this year, compared to an increase of 18% for the S&P 500. There are no catalysts other than that one to help Snap’s prospects. TikTok has to be kicked out of the United States.

Americans Are Spending 6% of Their Waking Hours on This Addictive App

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.