Fastly Climbs After TikTok Reprieve

The Commerce Department says it won't enact the ban that would have prevented U.S. service providers from enabling users to gain access to TikTok.
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Fastly  (FSLY) - Get Report was climbing Friday after an analyst said the cloud-service provider would benefit from the federal government's decision not to enforce an order that would have effectively prohibited the video-share app TikTok from operating in the U.S

Shares of the San Francisco company at last check were up 5.6% to $80.50. The stock advanced 5.9% in trading on Thursday.

On Thursday, the U.S. Department of Commerce said it would not enact the ban that would have prevented U.S. service providers from enabling users to gain access to TikTok.

TikTok owner ByteDance had pulled most of its TikTok traffic from the Fastly network last month.

Piper Sandler analyst James E. Fish said in an investors' note that while the news was “not overly surprising,” it likely to be viewed positively for both Fastly and the cloud-services provider Akamai Technologies  (AKAM) - Get Report, Bloomberg reported.

That said, Fish still expects TikTok to want to control its delivery of short-form video, much like Google's  (GOOGL) - Get Report YouTube, and as such, it will continue to build its internal content delivery network.

The Commerce Department said it was prohibited from enforcing the ban following an Oct. 30 ruling in U.S. district court in a case brought by three TikTok users.

The agency said it won’t enforce the order “pending further legal developments.”  The U.S. Justice Department said it intended to appeal the order.

There are currently two ongoing legal cases involving TikTok.

Earlier, ByteDance had asked a federal appeals court to block the Trump administration's order that the Chinese tech company sell off its U.S. assets.

The U.S. government's order, signed on Aug. 14 by President Donald Trump, set a deadline of Nov. 12 for the sale of Bytedance's U.S. assets. The order cites national-security grounds for the divestiture.

In September, ByteDance had agreed to sell a 20% stake in TikTok to Oracle  (ORCL) - Get Report and Walmart  (WMT) - Get Report.