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- According to Gene Munster, a TikTok ban will eventually occur.
- He referred to Thursday's congressional hearing where TikTok's CEO was questioned by policymakers.
- Stocks in the USA with Chinese business could be affected by a ban. China might retaliate.
According to Gene Munster, Deepwater Asset Management, a ban on US TikTok is only a matter time and could spell trouble for US stocks.
CNBC interviewed him about Thursday's congressional hearing, where TikTok CEO Shou Chew opposed a ban on the China-based short form video app or a forcible sale in the US.
Munster believed that the Biden administration would allow TikTok's stay this year in an effort to ease tensions between the US, China. However, once the political fire has died down, a ban will likely be in place, he stated, pointing out the heated questions that policymakers had asked at the hearing. This included intense criticism of the app.
He was asked if US companies operating in China are at risk of retaliation and he responded, "Tesla, Apple, and Nike — they're all pinched to this five-and-half hour hearings today."
TikTok was involved in the larger national security debate over Chinese companies. It has come under increasing scrutiny in the US due to concerns about its ability to spy on American users.
Analysts say Chew's appearance before Congress this Wednesday failed to calm policymakers about TikTok privacy policies. Dan Ives, a Wedbush analyst, called the hearing a "disaster".
The reality is that this is far more than TikTok. This is about US-China relations. A ban on TikTok will be detrimental for US-China relations. Munster stated that he believes it will increase some of the separation already there.
Although a TikTok ban may seem like a positive outcome for US competitors like Meta's Reels at first, the House committee expressed concern about the addictive nature of the app and its effects on teens' mental health.
Munster stated that Meta is not only benefiting from this ban, and that there was a 10% upside for the TikTok competitor. However, Meta could face headwinds. "Meta will be back in the spotlight if TikTok is banned, and I believe that Meta will have to answer the same questions as TikTok."
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By: jsor@insider.com (Jennifer Sor)
Title: A TikTok ban is inevitable and that spells trouble for US stocks, Gene Munster says
Sourced From: markets.businessinsider.com/news/stocks/tiktok-ban-china-tech-stocks-tesla-apple-meta-gene-munster-2023-3
Published Date: Fri, 24 Mar 2023 14:41:51 +0000
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