Following the confirmation thatMicrosoft is interested in purchasing TikTok, the American tech company’s stock price and total value experienced a significant surge as a result. However, the stock price and the total value has decreased in the week after the news, though this should not damper investor confidence.
A report by Business Insider highlighted how the stock rose 5%, leading to an approximate increase in total value by $77 billion. While the stock price has decreased over the week since the news, which originally came from ananonymous source before Microsoft itself confirmed it, these discussions have excited investors seeing a major opportunity as a consequence of President Donald Trump’s executive order effectively banning the app.
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On Thursday,President Trump signed an executive orderbanning transactions in the US related to TikTok and WeChat’s parent companies, citing national security risks though there are theories that the ban is for personal gratification. The ban on TikTok will go into effect next month unless its Chinese parent company ByteDance is able to sell its shares to an American-based company.
Microsoft will have considerable competition in purchasing TikTok, with reports indicating thatTwitter is attempting to purchase the Chinese video-sharing app. With hundreds of millions of daily users up for grabs, it is no wonder that the TikTok sweepstakes are highly competitive between various American-based companies looking to circumvent Trump’s executive order.
There is also competition outside of the app itself, with other apps attempting to emulate the platform.Instagram has recently introduced a new feature called Reelswhich contains most of the same characteristics of TikTok, albeit missing the advanced video editing uses of the latter app. If negotiations between ByteDance and potential buyers of TikTok fall through, the American photo and video sharing app can use its existing market dominance to fill the hole left in the social media landscape.
If any American company is able to purchase TikTok, expect its stock price and total value to skyrocket consequentially. However, it should also be taken into account that the app could undergo major changes stemming from its new ownership and the cultural differences it will experience over a transition period.
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