Video-sharing app TikTok's advertisement revenue is likely to triple in 2022 to more than $11 billion, exceeding the combined sales of its rivals Twitter Inc (TWTR.N) and Snap Inc (SNAP.N), according to research firm Insider Intelligence.
TikTok, which is owned by Chinese company ByteDance, is one of the world's most popular social media apps, with more than 1 billion active users.
"TikTok's user base has exploded in the past couple of years, and the amount of time users spend on the app is extraordinary," said Debra Aho Williamson, an analyst at Insider Intelligence.
Nearly $6 billion, or more than half, of this year's ad revenue, is expected to come from the United States, despite regulatory concerns over user data from the U.S being passed on to China.
This comes at a time when Tesla Inc TSLA.O Chief Executive Elon Musk disclosed on Monday he had abandoned a plan to join the Twitter Inc'sTWTR.N board just as his tenure was about to start, the latest move by the world's richest man that defied corporate America's norms.
Musk revealed last week he had accepted a board seat at Twitter, contradicting a regulatory filing he had published a day earlier in which he described himself as a passive investor.
Sources told Reuters at the time that Musk asked Twitter for a board seat weeks before the social media company agreed to the arrangement.
Musk and Twitter did not disclose the reason for the u-turn. Musk said in a regulatory filing on Monday he could now increase his 9.1% stake in Twitter or push the company to pursue transactions, even though he has no such plans at this time.
There was no sign that Twitter was worried that a hostile bid from Musk was imminent. In announcing the development, Twitter disclosed no shareholder rights plan, known as a "poison pill," that would force dilution if Musk tried to raise his stake above a certain threshold.
However, Twitter Chief Executive Parag Agrawal warned Twitter employees in a tweet on Sunday of "distractions ahead," a possible reference to Musk's criticism of the company through tweets. He added that he believed Musk's withdrawal was "for the best."
A Twitter spokesperson did not respond to a request for comment.
Twitter shares were up 2.6% at $47.48 in afternoon trading in New York on Monday. They are up more than 20% since Musk disclosed his stake in Twitter on April 4. Wall Street analysts say Musk's involvement attracted legions of retail investors to the stock.
Securities experts have pointed out that by delaying and mischaracterizing the disclosure of his stake in Twitter, Musk bought the shares more cheaply, saving himself $143 million by one estimate. It is unclear whether this would be a consideration for Musk, whose net worth is pegged by Forbes at $274 billion.