TikTok’s office in March after the U.S. House of Representatives overwhelmingly passed a bill that would give TikTok’s Chinese owner ByteDance about six months to divest the short video app’s U.S. assets or face ban. March 13, 2024 in Culver City, California.
Mike Black | Reuters
Kevin O’Leary is forming a consortium interested in acquiring TikTok, with a starting price of $20 billion to $30 billion, a 90% drop from the company’s valuation in its last round of financing.
The O’Leary Ventures chairman told CNBC’s “Street” that any deal for the short-form video sharing platform, which will be valued at $220 billion by 2023, according to PitchBook, is likely That would exclude algorithms based on user preferences that have helped make the platform so successful. Marks Asia. ”
“It’s the largest entertainment and business network in the United States today, so it has a lot of appeal and a lot of value,” he said said Friday.
But the Chinese government is unlikely to sell the algorithms, “so what you get is TikTok, a valuable domestic brand and 170 million users, but no data,” O’Leary said.
Potential buyers would have to “re-simulate” these algorithms in U.S. code and act as “stewards” to transition the platform from “TikTok China” to “TikTok USA,” resulting in a downward revision in valuations.
In early March, the U.S. House of Representatives voted in favor of a bill that would force TikTok owner ByteDance to divest its flagship global app or face an effective ban.However, it It may take several months before any TikTok-related legislation is introduced in the Senate.
It’s unclear whether the Chinese government will allow ByteDance to sell TikTok to U.S. buyers. The company lobbied hard against the bill.
Still, O’Leary said there was at least a 50% chance that the social media giant would be banned and forced to be sold after the U.S. presidential election early next year, and he was preparing for that possibility.
Any potential deal would require White House approval given its national security implications. O’Leary said he has discussed the matter with Republican presidential candidate Donald Trump and plans to meet with Joe Biden, who is seeking re-election.
The O’Leary Ventures chairman also said he was in talks with other parties interested in joining the buyout group and would solicit input from sovereign wealth funds starting in April.
Respectively, Former U.S. Treasury Secretary Steve Mnuchin has also expressed interest in acquiring TikTok.
“This was the most complex transaction ever in social media, and I had to build a new algorithm,” O’Leary said. “It’s a very interesting deal and I like it.”
TikTok did not immediately respond to a request for comment.
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