• Market Crumbs

TikTok Has An India Problem

Image via Kon Karampelas on Unsplash

Last week, India’s Ministry of Electronics and IT blocked 59 apps developed by Chinese firms "which are prejudicial to sovereignty and integrity of India, defence of India, security of state and public order."

"The Ministry of Information Technology has received many complaints from various sources including several reports about misuse of some mobile apps available on Android and iOS platforms for stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers which have locations outside India," the Indian government said.

The most notable app included in the ban is TikTok. The ban hits TikTok particularly hard, as India has accounted for more than 30% of the app's lifetime downloads to date, according to SensorTower data from April.

TikTok's recently appointed CEO Kevin Mayer was quick to distance the company from China and point to TikTok's commitments to India.

"I can confirm that the Chinese government has never made a request to us for the TikTok data of Indian users," Mayer wrote in a letter to the Indian government. "If we do ever receive such a request in the future, we would not comply. The privacy of our users, and the security and sovereignty of India, are of utmost importance to us."

Mayer emphasized that TikTok employs 2,000 people in India and has committed to spend $1 billion in the region, including plans to build a data center in India.

A report from China's Caixin Global cited sources close to TikTok's parent ByteDance as saying the company is anticipating losses in excess of $6 billion as a result of the ban.

The ban has created an opening for TikTok's competitors. India's Roposo said it added 22 million users in just two days following the ban, with the company's CEO Mayank Bhangadia saying "it has spiked so much because of all the love and support."

Another unlikely, yet not surprising, beneficiary of the ban is none other than Facebook's Instagram. Following the ban, Instagram announced it will test its Reels feature in India. The feature is essentially a clone of TikTok, enabling users to create 15-second videos that can be shared throughout the app.

"We’re planning to start testing an updated version of Reels in more countries," a Facebook spokesperson said. "We’re excited to bring this new version to more of our global community."

The implications of this ban cannot be understated for TikTok, which recently saw its private market valuation surpass $100 billion. With more than 30% of the app's downloads coming from India and the country having the second-largest number of internet users globally, TikTok needs to have access to the Indian market to continue its growth.

"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.

Leftover Crumbs

  • Uber acquires Postmates. Uber has acquired food delivery company Postmates for $2.7 billion in an all-stock deal. The deal comes after Uber failed to successfully acquire GrubHub due to regulatory concerns. Postmates was valued at $2.4 billion following its last funding round in September. "As more people and more restaurants have come to use our services, Q2 bookings on Uber Eats are up more than 100 percent year on year. We’re thrilled to welcome Postmates to the Uber family as we innovate together to deliver better experiences for consumers, delivery people, and merchants across the country," Uber CEO Dara Khosrowshahi said.

  • Tesla sells short shorts. Consistent with his persistent criticism of short sellers, Tesla CEO Elon Musk has kept his promise as Tesla is now selling "Short Shorts" for $69.420 on its website. The shorts' product description reads "Celebrate summer with Tesla Short Shorts. Run like the wind or entertain like Liberace with our red satin and gold trim design. Relax poolside or lounge indoors year-round with our limited-edition Tesla Short Shorts, featuring our signature Tesla logo in front with “S3XY” across the back. Enjoy exceptional comfort from the closing bell."

  • Anyone want an antibody cocktail? Regeneron Pharmaceuticals has started late-stage clinical trials of its antibody cocktail for use in preventing and treating COVID-19. Regeneron is testing the effectiveness of the cocktail in a collaboration with the National Institute of Allergy and Infectious Diseases (NIAID) for use in preventing infection of those who have had contact with coronavirus patients, as well as in patients who have already tested positive. The trial is being conducted at 100 sites and is anticipated to attract more than 2,000 patients.

  • Goldman Sachs slashes economic outlook. Goldman Sachs has lowered its third-quarter GDP forecast to an annualized gain of 25% from 33% previously as a result of the coronavirus. "The sharp increase in confirmed coronavirus infections in the US has raised fears that the recovery might soon stall," Goldman Sachs' chief economist Jan Hatzius said. "Although a significant part of the increase reflects higher testing volumes ... a broader look at the CDC criteria for reopening shows that not only new cases but also positive test rates, the share of doctor visits for covid-like symptoms, and hospital capacity utilization have deteriorated meaningfully in the last few weeks."

  • Facebook, Twitter halt user data requests. Following the introduction of the national security law last week, Facebook has halted user data requests from the Hong Kong authorities on its platforms. "We believe freedom of expression is a fundamental human right and support the right of people to express themselves without fear for their safety or other repercussions," a Facebook spokesperson said. Twitter followed suit, saying they will also pause all data and information requests from the Hong Kong authorities effective immediately.