Meta Stocks Surge to Record High Following TikTok Divestment Decision

Shares of Meta Platforms (NASDAQ:META), Facebook's parent company, reached an unprecedented peak on Friday following a significant legal victory that could impact one of its main competitors. Shares of Snap also rose in response to this news.

The U.S. appeals court upheld a law requiring China-based ByteDance to sell its popular short video app TikTok by early next year or face a ban in the United States.

The court's decision supports a bipartisan law signed by President Joe Biden, which potentially grants the U.S. government the authority to ban other foreign-owned apps posing data collection risks concerning American citizens.

TikTok, which has a user base of 170 million in the U.S., and its parent company ByteDance had previously challenged the law, arguing it violated their constitutional rights and restricted freedom of expression.

Following the ruling, Meta's stock value increased, reaching a record high of $629.78. The company's shares later dipped slightly, closing at $625.37, marking a 2.7% gain.

This financial surge highlights Meta's competitive stance in the social media landscape. The company competes with TikTok, particularly in user engagement and advertising revenue through platforms like Facebook and Instagram.

In the broader market, Alphabet (NASDAQ:GOOGL), the holding company of YouTube and Google, also experienced positive gains, with shares up 1.1% to $174.68. Shares of Trump Media & Technology Group, which operates the Truth Social platform and is majority-owned by presidential candidate Donald Trump, similarly rose, closing at $34.89, up 3.4%.

While the appeals court's decision currently supports Meta, this legal battle may not be the final chapter. ByteDance and TikTok are expected to appeal the decision, potentially bringing the case before the full appeals court or the U.S. Supreme Court.