Wall Street is buzzing with talk of selling TikTok as Congress passes a bombshell bill that would require it to be sold to its China-based owners, but tech insiders say such a deal would face tough hurdles. says video app users should be prepared for the possibility. Shut down instead.
Last week, bankers voted 50-0 to pass a bill on Thursday that would force Beijing-based ByteDance to sell TikTok within six months or face a full divestment. There has already been a surge of talk that people are racing to finalize bids for the hugely popular video app. Banned in the US.
On Friday, President Biden made a surprise promise to sign the bill. The bill, which is expected to be voted on in the House of Representatives later this week, has broad bipartisan support among U.S. lawmakers concerned that the app is a destructive propaganda and espionage tool for nations. Communist Party of China.
But potential buyers will face rebuke not only from U.S. antitrust regulators but also from the Chinese Communist Party, which has vowed to block any forced sales. TikTok, whose CEO Hsu Chu came under intense scrutiny from Congress earlier this year, has directly called on users to call their local representatives in protest.
TikTok’s huge audience of about 170 million U.S. consumers makes it an attractive prize for the few Big Tech companies with the resources to buy it, experts told the Post.
Angelo Gino, a tech industry analyst at CFRA Research, said that given the potential for long-term revenue growth, “almost every large tech company operating in the advertising market would be interested.” said.
Still, an acquisition by Microsoft, Meta, Apple or Google would raise significant antitrust concerns, and a smaller company like Snap lacks the resources to pull off an acquisition.
Software giant Oracle, which came close to acquiring TikTok until a previous push to ban the app was shelved in 2021, was one of the companies that emerged as a logical suitor.
“Oracle is certainly a likely buyer,” said one technology executive, who requested anonymity to discuss the situation. The executive noted that Oracle is currently storing data on U.S. users as part of TikTok’s “Project Texas” initiative.
“They already have a partnership with TikTok,” the executive added. “If they want to buy it, they will naturally buy it, but we still don’t know if they want to buy it and at what price.”
A dark horse candidate could be Bobby Kotick. Activision’s former CEO has approached ByteDance executive chairman Zhang Yiming to express interest, The Wall Street Journal reported, citing people familiar with the situation.
Kotick sat down with OpenAI CEO Sam Altman at a dinner at the Allen & Co. conference last week to discuss a potential acquisition, people familiar with the matter told the outlet. . ChatGPT makers could potentially use TikTok to train their AI models if partners like Kotick can raise the huge amount of funding needed to make the deal a success.
Today, TikTok is much bigger and more profitable than when Oracle last nearly closed the deal, with operating profits reportedly in excess of $20 billion in 2022.
“In the metamultiple, that would be $160 billion,” the technology executive added. “Who would buy a $160 billion company? That’s tough.”
One media banker said he would be “shocked” if TikTok was sold because “the size of the deal is too difficult.”
China’s Ministry of Commerce said last year that it must approve the sale of TikTok from its Chinese parent company ByteDance. strongly oppose any sale.
In 2020, China passed a comprehensive law requiring tech companies to obtain licenses to export artificial intelligence-related technology, but people close to the company say it is highly unlikely that the Chinese government would give permission for a sale of TikTok. That’s what it means.
Indeed, the Chinese Communist Party would view any attempt by the U.S. government to force its hand as “a serious violation of its honor and integrity as a sovereign nation,” the technology executive said.
The official added that the Chinese government would rather see TikTok shut down in the US than be forced to sell it, even if it could save $160 billion in the process. Ta.
“China is like, who gives?” the executive said.
Even if he did intend to sell, the bill’s six-month timeline would allow TikTok CEO Shou Chu, who came under intense scrutiny from Congress earlier this year, to accomplish a sale quickly enough to avoid the prohibition. Officials said they believe it would be nearly impossible to do so. A person familiar with the company’s thinking said:
“This bill has a predetermined outcome: a complete ban on TikTok in the United States,” TikTok spokesperson Alex Howrek said in a statement. “The government is trying to strip 170 million Americans of their constitutional right to free expression. It will destroy the lives of creators.”
We also wonder what a potential sale of TikTok from ByteDance would mean for TikTok’s operations in other countries and the ability of U.S. users to connect with international audiences, or whether ByteDance would Should I sell TikTok or keep those assets?
Another potential hurdle looms over the outcome of the 2024 election.
Presumptive Republican nominee Donald Trump, whose 2020 attempt to ban TikTok was blocked in federal court, shocked Republican China hawks by coming out against the bill last week. . President Trump said that if the TikTok ban were enacted, “Facebook and Zuckerschmuck would double their business.”
