The new Tik Tok ban that is supposed to go into effect in 2025 is hurting the stock today and I think we have to evaluate the impact. Tik Tok has been a very large part of the ELF story. The CEO yesterday said they’ll be fine either way in a Barrons story and they are on a lot of platforms (FB, IG, Reels, Twitch) and “go where the customers are” but Tik Tok is a big deal among Gen Z and they are the #1 Gen Z cosmetics line.
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Today’s drop isn’t much. Tik-tok damage must already be priced in. The conversations have been around for a while. We are down from $217. And if Tik-Tok isn’t sold to someone in US and the ban takes effect, some enterprising folks will make a similar alternate, Flip-Flop or something.
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If TT goes away, gen Z will still be with us. They will migrate to a different platform and ELF will go where they go. This is a non-issue as far as I can tell.
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