On Saturday, the House recently approved a bill that could lead to a ban on TikTok in the U.S. unless its Chinese owner, ByteDance Ltd., sells its stake within a year.

Shares of US-based TikTok rivals Meta Platforms (NASDAQ: META) and Snap (NYSE: SNAP) gained 1.4% and 2.8% in premarket trading Monday following the news, respectively.

The legislation was part of a larger foreign aid package that gained traction with broad bipartisan support, primarily focusing on aid for Ukraine and Israel.

The bill, which includes provisions to ban TikTok, passed with a significant majority of 360-58 and is now headed to the Senate after earlier versions faced delays.

Previously, a separate bill demanding a quicker, six-month divestiture period had passed the House overwhelmingly due to bipartisan concerns about national security linked to ByteDance.

The latest bill extends the deadline to nine months, with a potential three-month extension if a sale is underway.

However, the enactment of this legislation might be delayed by legal challenges. ByteDance has suggested it would likely pursue legal action to block the law, claiming it infringes on the First Amendment rights of the app's millions of American users.

“If eventually ByteDance goes down the forced sale route we see no chance TikTok would be sold with the algorithm as Beijing and ByteDance would never allow that to happen in our view,” Wedbush analysts led by Daniel Ives said in a Monday note.

“The value of TikTok would dramatically change without the algorithms and makes the ultimate sale/divestiture of TikTok a very complex endeavor with many potential strategic/financial bidders waiting anxiously for this process to kick off,” they added.

Should the app get banned in the US, Meta Platforms would be the most likely beneficiary “ given the strength of its Reels offering, which reached a $10B run rate in 3Q and was accretive to Meta’s consolidated advertising revenue as of 4Q,” Wedbush’s team wrote.

By Vahid Karaahmetovic