TikTok Doesn't Have Just An India Problem
Yesterday we wrote about India’s Ministry of Electronics and IT blocking 59 apps developed by Chinese firms, including most notably TikTok.
The Indian government said the apps "are prejudicial to sovereignty and integrity of India, defence of India, security of state and public order."
It appears India may have started a trend as the United States is now apparently "looking at" the possibility of banning social media apps developed by Chinese firms as well.
"We are taking this very seriously. We are certainly looking at it," U.S. Secretary of State Mike Pompeo said when asked if the U.S. should ban TikTok and other Chinese social media apps.
Pompeo compared the threat of Chinese social media apps to that of Chinese telecommunications companies Huawei and ZTE, saying "we have worked on this very issue for a long time."
"Whether it was the problems of having Huawei technology in your infrastructure we’ve gone all over the world and we’re making real progress getting that out. We declared ZTE a danger to American national security," Pompeo said. "With respect to Chinese apps on peoples' cellphones, the United States will get this one right too."
TikTok provided essentially the same response to the potential ban in the U.S. as it did to the ban in India.
"TikTok is led by an American CEO, with hundreds of employees and key leaders across safety, security, product, and public policy here in the U.S.," a TikTok spokesperson said. "We have no higher priority than promoting a safe and secure app experience for our users. We have never provided user data to the Chinese government, nor would we do so if asked."
As we detailed yesterday, TikTok's growth hinges on its ability to operate in countries with the largest number of internet users. India, which has the second-largest number of internet users globally, has accounted for 30% of the app's downloads, the most of any country.
However, despite accounting for less of TikTok's downloads than India, the U.S. represents nearly 20% of lifetime user spending on the app, the second-most of any country behind China.
The news caused shares of Snapchat to jump nearly 6% yesterday, reaching their highest level since just after the company's IPO in February 2017.
If the U.S. follows through and bans TikTok, the recent private market valuation in excess of $100 billion may very well start to look a bit too generous. Furthermore, a ban of TikTok in the U.S. is likely to receive a warm reception from Facebook and Snapchat, who would gladly fill the void of the increasingly popular app.
"The Pinterest of stock-buying apps." - Fortune
Public is an investing app that puts a social layer on the stock market. In addition to zero commission fees, fractional shares, and an intuitive UI, the app makes it possible to share why you believe in certain companies and industries, and learn from investors with a range of subject matter expertise.
Public also organizes stocks by themes so you can discover investment opportunities that align with your interests, like "Nom Nom Now" for companies in the food delivery game, "Click It, Ship It" for e-commerce companies, and "Infinity and Beyond" for companies innovating in space travel.
Get the app from this link to follow my moves (@hipstertrader) and start with a free slice of stock. 🍕
*Free stock offer valid for U.S. residents 18+. Subject to account approval.
Palantir files for IPO. Palantir, which describes itself as "the world’s leading software for data-driven decisions and operations," has filed paperwork with the U.S. Securities and Exchange Commission to go public. Palantir didn't disclose the timing, number of shares or amount it hopes to raise in the offering. Palantir, which provides data analytics technology to the U.S. government and intelligence community, is one of the largest technology startups, with its valuation reportedly around $26 billion. True to its secretive nature, Palantir didn't comment on the filing, which simply stated "The public listing is expected to take place after the SEC completes its review process, subject to market and other conditions."
Will Spotify see a ROI? Not everyone is convinced Spotify, which has spent heavily on podcasts, will see a return on their investment. Bernstein analyst Todd Juenger said the podcasts won't "generate much earnings" and subsequently downgraded shares of Spotify. "It’s tantalizing to draw a parallel between Spotify moving into exclusive, original podcasts with Netflix’s successful move into exclusive, original TV series and movies," Juenger said. "The situations, however, are not analogous in at least one very important way – consumers don’t have to pay for a Spotify subscription in order to listen to the exclusive podcasts. They just need to download the app."
Tech CEOs set to testify. The CEOs of Amazon, Facebook, Google and Apple are scheduled to testify to the U.S. House of Representatives' House Judiciary Antitrust Subcommittee on July 27. The CEOs, who will be able to attend virtually, will testify to the committee regarding the antitrust probe into their companies. "As we have said from the start, their testimony is essential for us to complete this investigation," the House judiciary panel chairman and the House antitrust subcommittee chairman said in a statement.
Deutsche Bank slapped with penalty. Deutsche Bank has been hit with a $150 million penalty by the New York State Department of Financial Services for its ties to Jeffrey Epstein. The regulator said Deutsche Bank "failed to properly monitor account activity conducted on behalf of the registered sex offender despite ample information that was publicly available concerning the circumstances surrounding Mr. Epstein’s earlier criminal misconduct." The penalty marks the first enforcement action by a regulator against a financial institution for ties to Epstein.
Wirecard seeks a buyer. Troubled German fintech company Wirecard's administrator said more than 100 investors have expressed interest in buying the company's core business and its holdings. "The aim is to find timely investor solutions in the interest of creditors, employees and customers," Michael Jaffe said. Jaffe acknowledged that Wirecard's North American assets were the furthest along in discussions.