Gene Munster, the managing partner at Deepwater Asset Management, recently shared his views on the future of TikTok following the Supreme Court’s ruling on the app’s potential ban in the U.S. Speaking on “Bloomberg Technology,” Munster expressed confidence that TikTok would continue to operate, despite the judicial review. He highlighted the political dynamics at play, suggesting that the bipartisan support for TikTok, which saw an unprecedented 82-87% approval in Congress when the bill was initially passed, has shifted significantly. This shift, according to Munster, indicates a high likelihood of TikTok remaining in business.
Munster emphasized that the Supreme Court’s decision is less impactful than the current political climate, particularly the changing stance of the Democratic Party. He believes this change in tone could lead to further legislative action, potentially allowing TikTok to stay operational without needing to divest from its Chinese owner, ByteDance. For investors, especially those with stakes in Meta (META), Munster sees a potential tailwind if TikTok remains, suggesting that Meta could capture a significant portion of TikTok’s user engagement with Instagram Reels, possibly boosting Meta’s stock by 5 to 10%.
Beyond the immediate implications for TikTok, Munster pointed out broader lessons for investors. He underscored the power of a compelling, addictive product like TikTok in influencing political decisions. This insight extends to other tech giants like Nvidia (NVDA), where similar product leverage could insulate them from regulatory challenges or push for more favorable policies.
Addressing the potential for TikTok to be sold, Munster doubts this will occur but notes if it does, the core algorithm would likely remain unchanged, with the key question being where the user data would be stored. He also touched on the political pressures evident from recent statements by U.S. leaders like Chuck Schumer, who advocate for finding a U.S. buyer for TikTok, although Munster believes the app will not change hands due to these pressures.
In terms of possible buyers, if a sale were to happen, Munster named Elon Musk as a potential candidate, alongside telecom companies or large tech firms with previous ties to the Trump administration. He estimated TikTok’s valuation for a sale to be between $50 billion and $100 billion, a feasible acquisition price for major companies. However, Munster’s main message was one of reassurance to TikTok users and investors, indicating that regardless of ownership, the platform’s availability and functionality are expected to persist, either in its current form or under new leadership.
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