Facebook rallies more than 6% following launch of its TikTok competitor

KEY POINTS

• Shares of Facebook closed up more than 6% on Thursday following the U.S. launch of Reels, a new Instagram feature designed to rival Chinese upstart TikTok.
• Reels is a short-form video feature that allows Instagram users to create content with overlaid audio and augmented reality effects, much as they already can on TikTok.

Facebook CEO Mark Zuckerberg in 2017.

KENZO TRIBOUILLARD

Shares of Facebook stock closed up more than 6% on Thursday following the U.S. launch of Reels, a new Instagram feature designed to rival Chinese upstart TikTok. 

Reels is a short-form video feature that allows Instagram users to create content with overlaid audio and augmented reality effects, much as they already can on TikTok.

The feature was first launched in Brazil in November 2019, but on Wednesday, Instagram released the feature in the U.S. and other markets as part of its Instagram app. 

For Facebook, TikTok has increasingly grown as a threat due to its growing popularity among U.S. teens and young adults. TikTok claims more than 100 million monthly active users in the U.S., a spokeswoman told CNBC.