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Earlier this week, the United States House of Representatives passed a bill that requires China’s social media platform TikTok owner ByteDance to sell the app or get banned in the country over concerns about Beijing misusing users’ data.
The bill has prompted significant protests across the nation.
If the Senate also passes the bill and ByteDance does the unexpected and decides to sell the platform, who will buy it and for how much?
Wedbush analyst Dan Ives estimates TikTok’s US operations value at $100 billion, which he predicts will potentially drop to $40 billion if a buyout excludes the company’s addictive algorithm, Axios reported.
TikTok’s US revenue in 2023 was between $16 billion and $20 billion, but CEO Shou Zi Chew said that the company was in the red due to heavy spending on data storage, e-commerce expansion, and a data security project with Oracle.
The company has 170 million monthly active US users, surpassing Facebook, Instagram, Snapchat or X, formerly known as Twitter, according to eMarketer.
The app reportedly generated only $200 million to $300 million in 2019, compared to 11 million US monthly active users in 2016, indicating a significant growth spurt in a short time.
However, TikTok suitors require a strong stomach due to unprofitability and migraine headaches associated with owning and operating a popular social media company.
Axios‘ business editor Dan Primack, and media editor Kerry Flynn report that ByteDance’s non-Chinese investors such as General Atlantic, Sequoia Capital, and Susquehanna International Group, are most likely buyers for TikTok.
This is due to their deep understanding of the company, ability to execute a share swap, and potential influencer involvement.
Unfortunately, due to antitrust concerns, we can’t expect any Big Tech companies — Google, Amazon, Apple, Meta, and Microsoft — to bid and it’s unlikely that other Fortune 50 players would show interest.
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