Fastly Inc's (NYSE:FSLY) share price has plummeted again on Friday after US President Donald Trump signed executive orders banning US residents from doing business with TikTok's parent company ByteDance and WeChat who are owned by Tencent…
Fastly's shares have fallen by 9.36% so far and are currently trading at $81.26 per share, but why do the executive orders signed impact Fastly?
Well, Fastly is an American cloud computing services company based out of San Francisco, California…
And, in its quarterly results last week, which topped estimates, it was revealed that the firms biggest customer was TikTok who accounted for 12% of its revenue, meaning the executive orders will significantly impact the company.
TikTok has come under a lot of scrutiny lately from the US government with suggestions that it is a national security risk and should be banned in the US.
There have been talks between Microsoft and ByteDance about a potential take over of TikTok's operations in the US, with some reports suggesting that Microsoft is pushing for a deal to take over TikTok in Europe and India as well…
Trump has given both companies until the 15th of September to conclude a deal; otherwise, he will ban the app.
Either way Fastly will be losing a significant part of its revenue as even if a Microsoft takeover materialises, they may want to move TikTok onto its own cloud infrastructure.
It could be a tall order for it to now hit its fiscal third-quarter 2020 guidance.