Playing the TikTok ban. Posting for the 4th time….
¥\~Previous Events
=They posted beautiful numbers during earnings but Mark started talking about bad AI numbers and the market panicked a bit.
=The market was digesting Meta's insane comeback anyway. They need something big to impress outside of expected large ad numbers.
= 3-0 unanimous decision by an appeals court decision to uphold Tiktok ban in December
¥\~Present
What about if one of their competitors vanishes overnight? We are playing the TikTok ban. This canon event is being heavily discounted.
It's down to nine people after that it cannot be changed. Trump submitted the amicus brief as this will be the last chance he could stop the ban without getting into some serious issues with his chosen board and Congress with both sides supporting the bill. With everything else that's on his plate, I believe Trump will call a spade a spade and will look into it and say he tried. He's already got the election win from Tiktok he doesn't need it as much and with Zuck now onside he can still push what he needs to push. The moves.
This is down to nine people and how they see national security. I've read up on the defense and prosecution legal appeals from before the original appeals trial (160 pages) and the US DOJ has an incredibly strong case, which is why the appeals court voted 3-0.
Each judge has a different view on amendments and their importance vs national security however we can base from the previous judges arguments that this is quite open and shut as three judges reached the same conclusion with two judges differing on the interpretation but arriving at the same conclusion.
If this goes through...it will get bigger than the initial 10% gain with the appeals decision. It will create a rally at which point there'll be many spots to take profit. The longer this ban stays in place the more of a rally Meta will gain (Snapchat, Google, possibly Reddit, too) but we bet on the big horse first.
The ad dollars on offer are gonna get carved up like a prize beast and these ad companies are going to add the spoils to their market cap.
Here are my estimates for possible results based on everything with 5-4 enough to uphold the ban.
5-4 Stay/Strike down
5-4 Uphold
6-3 Uphold
7-2 Uphold
My prediction: 6-3 Uphold
¥\~Future - Guidance/Event
Facebook delivered great numbers and good guidance except for AI comments. However, this quarter they'll be carving up a big slice of the ad pie.
Creatives: So quick admission I used to work in social advertising years ago and the creatives as they are known are the images and videos used for a digital advert and they come locked into certain aspect ratios and formats. This means companies that have locked in months of creatives from agencies will have to move their TikTok ads somewhere the format works. Snap, Google, and of course Meta (Big Horse)
Facebook's ad budget: Is going to swell and we all know that the catalyst will be continuing the rally when they announce earnings in Early February.
¥\~Key Dates = January 10th, January 19th, January 20th
¥\~Risks to thesis = Ban does not go through - This is a binary event, the probabilities are high that it will go through but it is always possible it does not.
¥\~Checks = Last appeals decision Meta went up 10% in the lead-up to the appeals decision although this was not the final decision so this has the potential to rise further.
¥\~Long-term potential = Once the vote goes through will re-up and hold medium/longer-term options.