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Business tycoons such as Musk should be ready to spend tens of billions of dollars to acquire TikTok’s U.S. operations if parent company ByteDance decides to sell.
TikTok could be subject to a ban in the United States if the Supreme Court decides to uphold a national security law in which service providers such as apple and Google There will be a penalty if the app is hosted after the Sunday deadline. ByteDance has not said it will sell the app’s U.S. unit, but the Chinese government has considered X owner Musk’s plan to acquire the business as part of several options being considered, Bloomberg reported on Monday.
If ByteDance decides to sell, it could cost potential buyers $40 billion to $50 billion. This is the valuation of TikTok’s US business by CFRA Research Senior Vice President Angelo Zino. Zeno’s valuation is based on estimates of TikTok’s U.S. user base and revenue compared to rival apps.
TikTok has about 115 million monthly mobile users in the U.S., slightly behind Instagram’s 131 million, according to estimates from market intelligence firms sensor tower. This puts TikTok ahead Snapshot, interest and RedditAccording to Sensor Tower data, the U.S. monthly mobile user bases in these three countries are 96 million, 74 million, and 32 million respectively.
However, Zino’s estimate was lower than the more than $60 billion he estimated for the sector in March 2024, when the House passed the original national security bill and President Joe Biden signed it into law the following month.
Zino told CNBC in an email that the downgrade was due to TikTok’s current geopolitical woes and “a pickup in industry multiples” since March. Zeno’s estimate does not include TikTok’s valuable recommendation algorithms, which U.S. acquirers would not receive as part of the deal. Those algorithms and their alleged ties to China are at the heart of the U.S. government’s view that TikTok poses a national security threat.
Bloomberg Intelligence analysts estimate TikTok’s U.S. business at $30 billion to $35 billion. This is an estimate they released in July, when they said the value of the unit would be “discounted due to forced sales”.
Analysts at Bloomberg Intelligence pointed out that finding a buyer for TikTok’s U.S. business that can both afford transaction costs and deal with the ensuing data privacy regulatory scrutiny makes the sale challenging. It could also make it difficult for buyers to expand TikTok’s advertising business, they wrote.
A business consortium including billionaire Frank McCourt and O’Leary Ventures chairman Kevin O’Leary has made a bid to acquire TikTok from ByteDance. O’Leary has previously said the group is willing to pay up to $20 billion No algorithm is required to acquire U.S. assets.
O’Leary said in a statement on Monday that, unlike Musk’s bid, the O’Leary Group’s bid would not be subject to regulatory scrutiny interview with Fox News.
O’Leary said he was “a huge fan of Elon Musk,” but added that “the likelihood that regulators would allow this to happen, even under the Trump administration, is slim.”
TikTok, X and O’Leary Ventures did not respond to requests for comment.
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