TikTok’s Pain Could Be These Social Media Stocks’ Gain

US President Donald Trump has thrown TikTok a lifeline. The ByteDance-owned company has been given a 75-day reprieve to continue operating in the US, during which time it will need to find a buyer. Trump wants at least half to be owned by US investors. 

There is much speculation about potential buyers. Elon Musk and Youtube’s biggest creator MrBeast are among the names that could join a bidding war. 

TikTok’s future in the US is not guaranteed, however — and this uncertainty could create opportunities for social media stocks.

Source: Yahoo Finance

Meta to Benefit but Zuckerberg Sparks User Boycott 

In January, Meta [META] launched a program to incentivize influencers to post content exclusively to Instagram Reels by offering the chance to earn up to $5,000 within 90 days of joining the program.

TikTok was not mentioned by name, but it is widely assumed that the program is targeted at US creators who have built up a big following on TikTok and are now looking for alternatives. 

Meta has been investing heavily in its artificial intelligence (AI) footprint to improve its Instagram offering. CFO Susan Li said on its Q3 2023 earnings call back in October that its spending has resulted in an 8% uptick in time spent on Facebook and a 6% increase in time spent on Instagram. 

Ahead of its Q4 earnings on Wednesday, CEO Mark Zuckerberg wrote in a Facebook post that 2025 will be “a defining year for AI”. He expects to invest $60bn–65bn this year, up from an estimated $38bn–40bn in 2024. 

Meta could be a beneficiary of the uncertainty surrounding TikTok’s future, but the big issue beyond the Q4 earnings is whether the company will continue to see an exodus of users from its platforms: Instagram, Facebook, Threads and WhatsApp. 

Users have been deleting their accounts following Meta’s decision to get rid of fact-checkers. Zuckerberg, who has been cozying up to Trump, has suggested these users are “virtue signaling”.

Snapchat Hopes to Revitalize Its US User Base 

Another beneficiary of the TikTok uncertainty could be Snapchat [SNAP], whose US user base could do with a boost.

Snapchat’s daily active user (DAU) total in the US has been stalled around the 100 million mark for the past two years. In the meantime, DAUs outside the US have grown from 263 million in Q3 2022 to 343 million in Q3 2024. 

The problem is that DAUs outside the US are nowhere near as valuable, bringing in just $1.09 of revenue in Q3 2024 versus $8.54 per North American user. 

In a bid to revitalize its stagnating DAU base stateside, Snap launched a monetization program in December that will enable creators to earn ad revenue on content posted to Spotlight, its TikTok competitor, which has seen viewership increase 25% year-over-year.

Snapchat’s Q4 earnings being reported on February 4 should be an opportunity for the company to discuss how it expects the monetization program to boost its North American DAU base.

Snapchat has also reportedly been offering discounts to advertisers willing to spend more dollars on the app. According to a report from The Information on January 22, advertisers that spend more than $100,000 can receive 20% back in free ad spend. 

Reddit and Pinterest Attempt to Attract Advertisers 

The Information, citing media buyers, said that Reddit [RDDT] was also taking advantage of advertisers fleeing TikTok. 

Those willing to spend between $150,000 and $1m are being offered ad credits of 10% and those spending over $1m can receive credits of 15%, capped at $500,000. Advertisers need to have taken up the offer by the end of January. 

Though Reddit is obviously not a short-form video platform, the company’s Q4 earnings on February 12 could shed some light on the impact TikTok’s potential ban could have on ad revenue. 

Pinterest [PINS] is taking advantage of the situation as well. A pitch deck from the company seen by Business Insider said that “as major shifts take place across social platforms, many brands are developing new plans to deliver their goals”. The company is offering the opportunity of free ad space on its platform for a limited time. 

Like Reddit, Pinterest is not a direct competitor to TikTok, so the question is whether it can be successful in luring new advertisers to its site. Reports suggest that a number of companies have been reluctant to continue advertising on TikTok following its temporary shutdown. Pinterest could reveal more on its Q4 earnings call on February 6. 

With TikTok’s fate in the US hanging in the balance, it would be no surprise to see Meta, Pinterest, Reddit and Snapchat continue to compete for their slice of TikTok’s ad spend pie with further discounts and incentives.