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

(Bloomberg) -- Snap Inc. shares soared on Monday as lawmaker efforts to ban TikTok appeared to be gaining traction in the US.Most Read from BloombergTrump’s Threat of a Third-Party Run Is Undercut by ‘Sore Loser’ LawsHolding Cash Will Be a Winning Strategy in 2023, Investors SayUS Banks Are Finally Being Forced to Raise Rates on DepositsTesla Slashes Model S and X Prices for the Second Time This YearBrits Say Prince Harry Should Attend Coronation, But Meghan Markle and Prince Andrew Should Stay Read More...

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

Most Read from Bloomberg

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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