Investing.com -- Shares of Snap Inc . (NYSE:SNAP) and Meta Platforms Inc. (NASDAQ:META) declined 2.9% and 2% respectively, following news that President-elect Donald Trump may issue an executive order to temporarily halt the enforcement of a law requiring the sale or ban of TikTok. This move would delay the implementation of measures that could have benefited Snap and Meta by reducing competition in the social media space.
The Washington Post reported, citing anonymous sources, that Trump is considering a suspension of the TikTok sale-or-ban law for 60 to 90 days in hopes of securing an early victory in his second term. The law, signed by President Joe Biden, mandates that TikTok's owner, ByteDance, divest the app by January 19 or face a ban. The Supreme Court is expected to allow the law to proceed, but Trump's potential executive order could give the proceedings a "cinematic flourish."
Trump's interest in TikTok, as expressed on his TikTok account and other platforms, contrasts with his previous attempts to ban the app during his first presidential term. Instead, he now appears to be exploring various options to "save TikTok," which could include unconventional dealmaking or legal maneuvers.
The potential delay in enforcing the TikTok ban poses a threat to Snap and Meta, as TikTok remains a significant competitor in the social media sector. The uncertainty around TikTok's future in the U.S. market has led to investor concerns, contributing to the decline in Snap and Meta shares.
The broader implications of Trump's potential actions on TikTok's operations and ownership remain uncertain. While some of Trump's allies have suggested that he alone has the "consummate dealmaking expertise" to resolve the situation, legal experts have expressed skepticism about the effectiveness of an executive order in overcoming a law passed with bipartisan support.
As the social media landscape continues to evolve, the fate of TikTok in the U.S. will likely have ongoing repercussions for companies like Snap and Meta. Investors are closely monitoring the situation, as the outcome could significantly impact the competitive dynamics within the industry.
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