Morgan Stanley thinks Big Tech dark horse is candidate to buy TikTok

Amazon buying TikTok could be a “strong strategic fit” for the dominant e-commerce platform, according to Morgan Stanley. “We believe the combination of AMZN’s strong ad tech stack, advertiser/third party seller base, first party data and logistics assets put together with TikTok’s estimated ~32bn hours of U.S. consumer engagement could build a viable social shopping network,” Morgan Stanley analyst Brian Nowak wrote in a note on Friday to clients. The Supreme Court early Friday upheld a law that effectively bans TikTok in the U.S. starting Sunday. Under that law, China-based ByteDance must divest its ownership of TikTok or face a ban of the popular social video app in the U.S. Nowak believes reports surrounding a possible deadline extension to the looming shutdown of TikTok on Jan. 19 could mean a sale is now more likely. “The extent to which AMZN could drive more traffic/transactions to its platform through first party ad inventory could lead to even higher customer unit economics,” Nowak said. On top of an “improved” social shopping network, Nowak also pointed to the potential to increase competition in online advertising and Amazon’s strong balance sheet and ability to absorb a sizable purchase as other reasons Amazon-TikTok could be a strategic fit. Neither Amazon nor Tiktok have commented on a possible combination. Morgan Stanley said it has “no knowledge of any specific transaction being discussed.” Amazon declined CNBC’s request for comment. On Wednesday, NBC News, citing three people familiar with the discussions, reported that President Joe Biden’s administration is exploring ways to keep TikTok available in the U.S. President-elect Donald Trump filed an amicus brief to the Supreme Court last month, asking it to temporarily block the law so that he has the opportunity to “pursue a political resolution” once he takes office on Jan. 20. While the Chinese government is reportedly considering a plan for Elon Musk to acquire TikTok’s U.S. operations, Reuters cited sources familiar with the matter as saying that TikTok is planning to shut down the app on Sunday if the Supreme Court upheld the ban. President Biden signed a bill into law last April that required ByteDance to sell TikTok within nine months or face a nationwide ban in the U.S. AMZN YTD mountain AMZN, year-to-date In early trading Friday, Amazon rose as much as 2.5%. Led by CEO Andrew Jassy, Amazon outperformed the broader market by climbing 44.4% in 2024.