The U.S. Supreme Court has upheld the law requiring China-based ByteDance to divest its ownership of TikTok by January 19 or face an effective ban of the popular social media app in America.
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Privately held ByteDance has so far refused to sell TikTok, meaning many U.S. users could lose access to the app in coming days. The app may still work for those who already have TikTok on their phones, although ByteDance is threatening to shutdown the app on the January 19 deadline.
In a unanimous decision, the Supreme Court sided with the Biden administration, upholding the effective ban on TikTok, which has been accused of being used by the Chinese government to spy on Americans. Many politicians view the social media app as a threat to U.S. national security.
Under terms of the ban, third-party internet service providers such as Apple (AAPL) and Alphabet (GOOGL) will be penalized for making the TikTok app available after January 19.
National Security Threat
“Congress has determined that divestiture is necessary to address its well-supported national security concerns regarding TikTok’s data collection practices and relationship with a foreign adversary,” wrote the Supreme Court in its ruling.
TikTok’s fate in the U.S. now lies in the hands of president-elect Donald Trump, who originally favored a ban but now appears to have changed his mind. In December, Trump asked the Supreme Court to pause the ban’s implementation and allow his administration “the opportunity to pursue a political resolution.”
Trump’s inauguration is scheduled for January 20, one day after the TikTok ban goes into effect. TikTok CEO Shou Chew is one of several technology leaders expected to be in attendance at the event.
Is AAPL Stock a Buy?
Neither TikTok or its parent company ByteDance are publicly traded. So instead, we look at one of the company’s most impacted by a ban of the TikTok app, Apple. Currently, the stock of Apple has a consensus Moderate Buy rating among 29 Wall Street analysts. That rating is based on 19 Buy, seven Hold, and three Sell recommendations made in the last three months. The average AAPL price target of $244.77 implies 6.43% upside from current levels.
