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