Morgan Stanley notes recent news reports suggest both President Biden and President-elect Trump are interested in extending the upcoming January 19 deadline to give TikTok more time to reach a suitable divestiture that would allow TikTok to keep operating in the U.S. Recent reports also suggest China may be contemplating allowing a divestiture, the analyst added. In this context of a divestiture looking “increasingly likely,” the firm outlines three reasons TikTok could potentially be a “strong strategic fit” for Amazon (AMZN), including an improved social shopping/ad network offering, competition in the broader online ad space and Amazon’s strong balance sheet. Morgan Stanley has an Overweight rating and $280 price target on Amazon shares. Companies in the social media space that compete with TikTok include Meta (META), Alphabet’s (GOOG) YouTube (GOOGL), Pinterest (PINS), Reddit (RDDT) and Snap (SNAP).
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