Social media stocks Snap, Meta gain after Supreme Court hearing on TikTok

Shares in social media companies Snap Inc (NYSE:SNAP ), Meta Platforms Inc (NASDAQ:META ) rose after a Supreme Court hearing on Friday, signaling support for upholding a potential ban on TikTok in the United States.

During a hearing lasting over two hours, the Supreme Court heard arguments from both sides. Lawyers for the U.S. government argued that TikTok poses a significant national security threat due to its ties to its Chinese parent company, ByteDance.

Earlier in the day, tech stock, including Meta traded lower in pre-market trading. Meta climbed 2.5% after the hearing, while Snap surged over 7%. 

TikTok would face a ban in the US unless its Chinese owner divests from the company before Jan. 19. However, President-elect Donald Trump, who will begin his second term on January 20, has voiced opposition to the ban.

The government's lawyers also addressed a point raised earlier by TikTok's legal team that if placing a warning on TikTok for users could be enough to address concerns about its ties to China without banning it.

"I don't think that would address the government's national security concerns," Elizabeth Prelogar, the government's lawyer said. "There is a distinct, sovereign harm to the US if our foreign adversary could collect this massive data set about 170 million Americans."

However, some of the justices expressed concerns about the broader implications of a ban on free speech. 

Source: Investing.com