REPLAY --> TIKTOK FLASH CALL 3/10

The Bipartisan Senate legislation (the RESTRICT Act), backed by the White House, stands a good chance of becoming law.

The proposal, introduced this week, would expand executive branch powers to restrict or prohibit the availability of tech and communications products -- including mobile apps -- from adversarial countries, including China and Russia. 

JT and Paul highlighted how the legislation could work against TikTok and the ongoing prospect of action by CFIUS (Committee on Foreign Investment in the U.S.) to regulate or prohibit TikTok's U.S. operations.

Our view is that the probabilities favor either/or we get 1) the option to ban if deemed in the interest of national security via legislation 2) find a path forward through CFIUS and Texas Act to allow TikTok to operate as part of byte dance or force some type of divestiture.

TikTok, in our base case, will continue operating in the U.S. and probabilities of that continuing will fluctuate based on China / U.S. relations.

With regards to the Comm sector, any decline in time spent / performance related to decreased usage of the platform obviously hurts marginal ad dollars. Increased uncertainty with respect to to future ownership of the platform, or viability is also negative to marginal allocation. As we get closer to a decision point whether legislative or through CFIUS, it will result in a pause in allocation decisions with respect to to advertising budgets

We also focused on the potential political fallout of aggressive measures against TikTok as the Presidential campaign season gets underway.