A federal appeals court on Friday upheld a law that could lead to TikTok getting banned within the U.S. Meta Platforms stock gained in Friday trading, along with Snapchat parent Snap.
The U.S. Court of Appeals for the District of Columbia Circuit ruled that the potential TikTok ban is constitutional, denying a challenge from TikTok parent company ByteDance. The law, signed by President Joe Biden in April, requires China-based ByteDance to sell TikTok to another company, or the popular short-video site will be banned in the U.S.
On the stock market today, Meta stock gained more than 2% to 626.42, reaching another all-time high. The social media giant could see TikTok users switch to the Reels short-video product it offers on Facebook and Instagram, in the view of analysts.
Snapchat also offers a short-video product. Snap stock climbed more than 3% to 12.55.
Shares of YouTube parent company Alphabet are up around 1% at 174.44.
TikTok Ban: What Will Trump Do?
There are still major questions hanging over the TikTok ban outside of the ByteDance legal challenge. President-elect Donald Trump was skeptical of the legislation on the campaign trail, saying in the spring it would give too much power to Meta. The Washington Post reported last month that he would try to halt the ban, citing unnamed sources.
Under the law, TikTok must find new ownership by Jan. 19 – just before Trump's inauguration. TikTok could attempt further appeals, including to push the issue to the Supreme Court.
A bipartisan group of lawmakers called TikTok a threat to national security when Congress approved the law in the spring. TikTok, however, has called it a violation of the First Amendment.
Oracle Hit By Potential TikTok Ban?
Another stock to watch for the potential TikTok ban is Oracle. TikTok relies on Oracle's cloud infrastructure service to power its short-video app in the U.S.
In its annual report filed with regulators in June, Oracle said "revenues and profits would be adversely impacted" if TikTok is banned.
But Oracle stock was up 2.7% at 191.23 in recent trading Friday. The database software giant has rallied more than 70% this year and reports fiscal second quarter earnings Monday.
When Oracle first disclosed the TikTok ban as a risk in June, Evercore ISI analyst Kirk Materne wrote that TikTok could be worth between $480 million and $800 million in annual revenue for Oracle Cloud Infrastructure, or about 5% of the division's sales. But he added in the June client note that it was "very early days" to be worrying about the potential impact for Oracle.
