TikTok scrutiny could be bad news for U.S. companies, Fast Money traders say
Potential government action against Chinese social media giant TikTok could result in backlash that damages U.S. companies, according to traders and guests on CNBC’s ” Fast Money .” TikTok CEO Shou Zi Chew testified before Congress on Thursday, taking heat from both sides of the aisle. Many members of Congress have called for TikTok to be either banned in the U.S. or for some sort of sale of the company that would wall off American user data. A ban of TikTok could be a boost, at least in the short-term, to its social media competitors in the U.S., but the repercussions from China could hurt U.S. companies longer term, according to Seymour Asset Management CIO Tim Seymour on “Fast Money.” Shortly before the TikTok hearing, a China Ministry of Commerce spokesperson said the country would “resolutely oppose” a forced sale, the Associated Press reported. “The Chinese government has spoken for the first time on this, and it’s not pretty,” Seymour said. Guy Adami, director of advisor advocacy at Private Advisor Group, said the potential blowback from China was the main thing he was looking for after the hearing. “It hasn’t happened yet, and I hope it doesn’t happen. But the companies in the crosshairs are clearly names like Starbucks , McDonald’s , and Apple ‘s at the top of that list. And I don’t think that risk has been priced in nearly significantly enough,” Adami said. And government action against TikTok could be a long-term threat to U.S. social stocks like Meta Platforms , even if a ban creates a short-term bump, Deepwater Asset Management’s Gene Munster said. “This is not just all good for Meta either. As you watch this, you see there is a huge concern about the addictive aspects of short format video and social media. That’s Reels as well. I think that while this seems to be a clear benefit in the near term, which I don’t think is priced in, we’re going to see changes,” Munster said.
