The Biden administration is threatening to ban TikTok from the US, and talks about a possible sale of its US operations to an American company have increased. At the same time, China may not approve a sale, as reported by The Information.

Maintaining fair value estimates on Alphabet, Meta and Snap

In our view, the uncertainty surrounding the possible ban or sale of TikTok could benefit Snap, Meta’s Instagram, and Google’s YouTube. We are maintaining our $154, $260, and $16 fair value estimates for Alphabet GOOGL, Meta META, and Snap SNAP, respectively.

First, this uncertainty could push some TikTok content creators to focus more on, and possibly begin, pushing their audiences to other social network platforms. Obviously, if a ban is approved and enforced, the content, user count and engagement, and likely ad dollars for Snap, Instagram, and YouTube will increase.

Second, before any deal can be executed, there will be questions about whether TikTok’s powerful algorithms, which were developed by engineers at ByteDance, can be used after the deal, or must be completely rebuilt. Any interruption or decline in the quality of TikTok’s ability to provide relevant and engaging content could push its users and creators to spend more time on other platforms.

Meta Could be the Main Beneficiary

And third, Meta could be the main beneficiary of a TikTok sale as an increased focus on the presence of a formidable competitor like TikTok may reduce antitrust pressure on Meta and weaken the Federal Trade Commission’s case. Plus, per Meta’s user count, the presence of TikTok has not affected Meta’s network effect.

For Snap, which has a weaker network effect than Meta, a possibly more trusted US TikTok may make it more difficult to attract users away from, or keep them from migrating to, TikTok. However, the firm’s North America user count has continued to grow even after the coronavirus pandemic.