Would TikTok’s Downfall Make Snapchat a Buy?
ByteDance's TikTok (known as Douyin in China) caught fire after its launch in late 2016. The short video app attracted 500 million monthly active users (MAUs) by mid-2018, then surpassed 800 million MAUs earlier this year.
TikTok's meteoric rise seemingly threatened Snap's (NYSE: SNAP) Snapchat, which targets the same Gen Z market with its ephemeral messages and short videos. TikTok clearly covets Snap's core market: It bought so many ads on Snapchat it became its top advertiser last year, according to MediaRadar, and it poached over a dozen employees from Snap.
That's why a double whammy of bad news for TikTok recently boosted Snap's stock. First, Indian regulators banned TikTok, along with dozens of other Chinese apps, citing privacy concerns and escalating tensions with China. Second, Secretary of State Mike Pompeo claimed the U.S. was also "looking at" a ban on all Chinese social media apps, including TikTok, during a recent Fox News interview. Could TikTok's recent regulatory pain generate long-term gains for Snap's investors?
Source Fool.com
