Snap Stock Surges as Push to Ban TikTok Gains Steam in US Congress

Snap Inc. shares soared on Monday as lawmaker efforts to ban TikTok appeared to be gaining traction in the US.

(Bloomberg) — Snap Inc. shares soared on Monday as lawmaker efforts to ban TikTok appeared to be gaining traction in the US.

The Snapchat owner rose 9.5% after US Senate Intelligence Committee Chairman Mark Warner told Fox News on Sunday that he plans to introduce a bill this week to allow the US to ban Chinese technology, including the social media service owned by ByteDance Ltd.

Monday’s gain pushed Snap shares above the 200-day moving average for the first time since 2021, according to data compiled by Bloomberg.

Pinterest Inc., which competes with Snap for digital advertisements, gained 1.1% while Facebook owner Meta Platforms Inc. fell 0.2%.

Snap shares have been battered amid rising competition in short-form video platforms and a gloomy market for digital ad spending. While Wall Street analysts have been speculating that rivals such as Alphabet Inc.’s YouTube or Meta Platforms could benefit more from a potential TikTok ban, Snap has underperformed peers. Since the end of 2021, Snap is down 75% compared with a drop of 45% for Meta Platforms and 27% for Pinterest.

What Bloomberg Intelligence Says

YouTube might gain the most user market share among social media peers if US lawmakers move ahead with a ban of TikTok. While Meta Reels and other platforms such as Snap and Roblox could also see an engagement boost, we believe YouTube’s content-recommendation algorithm, coupled with its revenue sharing model for user-generated content, might lead more creators to shift to YouTube.

—BI analysts Mandeep Singh and Damian Reimertz

–With assistance from Jeremy R. Cooke.

(Updates with closing prices.)

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