Federal Friday: Congress Buying This 1 Stock As It Moves to Ban TikTok

How U.S. Federal Moves Might Boost This Social Media Leader's Stock

Dear Bottom Line Investor,

Welcome to "Federal Friday," where today we delve into the intricate interplay between federal legislation and investment opportunities.

In this edition we’re focusing in on the tech giant Meta Platforms, Inc. (META), known for its ownership of Facebook and Instagram, and why it’s become an investment-darling of Congress as the U.S. legislature has declared ‘war’ on Chinese-controlled social media app TikTok.

Source: stockcharts.com

The War on TikTok Leaves Meta as the Big Winner

The recent congressional approval of a TikTok ban has thrust the fate of this Chinese-owned app into uncertainty, setting the stage for a legal battle that might span years. As the legislation looms, potential investors and existing stakeholders in the social media landscape are evaluating the implications.

Notably, Michael McCaul, Texas Representative and ranking member of the House Foreign Affairs Committee and Chair of the House Homeland Security Committee, offers unique insights.

Specifially, his recent trades in Meta stock (Totaling an investment of between $200,000 and $500,000) suggest a strategic foresight into the evolving dynamics of U.S. tech policy.

Source: Capitol Trades.

The McCaul Effect

On March 1 and March 5, McCaul executed timely trades in Meta stocks, aligning his investment moves with significant federal actions concerning TikTok.

Image Source: Wikimedia Commons.

His roles potentially provide him with advanced insights into federal plans, making his investment moves particularly noteworthy.

That said, while his insider perspective might hint at Meta's advantageous position in a scenario where TikTok faces restrictions, it doesn’t take a rocket scientist (or Congressman) to conclude that Facebook is the main beneficiary of TikTok’s travails.

The Right Time to Buy Meta?

As of early March 2024, Meta's stock was trading at an average of $497.71, but recent updates from Yahoo Finance indicate a slight dip to $468.24 as of May 2024. This decrease presents a potentially attractive entry point for investors.

With the looming TikTok ban, Meta’s platforms are positioned to capture the migrating user base, which could lead to increased ad revenue and a rebound in stock prices.

The Bottom Line

As we watch the legislative developments unfold, Meta stands out as a proactive choice for investors looking to capitalize on the shifting sands of social media regulations.

Investing now, while the stock experiences a slight dip, could position you ahead of the curve, ready to reap the benefits as the situation evolves.

Happy Investing,

The BLI Staff

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