The illustration shows the TikTok logo displayed on a mobile phone screen.
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Canadian investor Kevin O'Leary is still interested in a TikTok deal, but that's not possible under current law, he told CNBC, as President Donald Trump extended the deadline to ban the social media platform.
As part of a wave of executive orders following his inauguration Monday, Trump 75-day delay to enforce the law This would effectively ban TikTok, giving its management “an opportunity to determine the appropriate course of action.”
Trump had promised this step in A Social media sharing On Sunday, a deal was also floated that would make the platform active in the US under a joint venture with 50% US ownership.
“That 50/50 deal, I would like to work on it with Trump, as would any other potential buyer… but the problem with some of these ideas is that they are not consistent with the Supreme Court ruling,” the investor said. He is widely known for his role on ABC's Shark Tank.
O'Leary declared that with “People Show For TikTok,“The effort, led by Project Liberty founder Frank McCourt, offered ByteDance $20 billion in cash to buy TikTok in an appearance on… Fox News “America's Newsroom”.
Speaking to CNBC, he said the proposed deal does not include ByteDance's TikTok algorithm, which has been a major point of scrutiny by US lawmakers, adding that his group has an alternative algorithm.
ByteDance did not announce any deals before Sunday's deadline to divest from TikTok after the Supreme Court Upheld the Protecting Americans from Foreign Controlled Applications ActOr bavaka, The same applies to TikTok.
McCourt confirmed to CNBC that the Project Liberty team remained “ready to work collaboratively with the Trump administration, ByteDance and a consortium of US partners to finalize this important deal.”
“Project Liberty has a proven technology stack already in use and provides a clear path to addressing Congress' national security concerns while keeping TikTok running,” he added.
Legal obstacles
The companies involved with TikTok had mixed reactions to Trump's executive order. Providers like Oracle and Akamai have willingly kept TikTok online, while Apple and Google have yet to get ByteDance-owned apps back in their stores.
According to O'Leary, while extending Trump's ban would likely provide protection for the likes of Oracle and Akamai, it is unclear whether ByteDance's divestment deadline will be extended.
“What we need is not actually a 75-day extension. What we need is to go back and ask Congress to open it up and provide these new options, because they are not available now,” he said.
He added: “I would like to make a deal, if the law required it, but I do not have the luxury of violating a congressional order.”
Legal experts who spoke to CNBC agreed that the legal status of TikTok and Trump's executive order remain uncertain and that any efforts to strike a TikTok deal may face challenges.
“It appears to be inconsistent with the statute. Congress carefully included certain dates and procedures in the statute, which SCOTUS found constitutional,” said Carl Tobias, a law professor at the University of Richmond.
“Therefore, a federal court could find that the order violates the law and invalidate it,” he said, adding that such action could take a long time if the government appeals to SCOTUS.
Sarah Krebs, director of the Technology Policy Institute at Cornell University, agreed that the executive order was inconsistent with the Supreme Court's decision, adding that it said nothing about progress toward qualified divestiture.
Given that violators of the TikTok law could face billions of dollars in fines, it's not entirely wise for the parties to take Trump's assurances about the law and the SCOTUS ruling, Krebs said.
“They are certainly gambling with the law and putting too much faith in the executive branch,” she added.
China is softening its stance
TikTok, O'Leary told CNBC It could bring in $20 to $30 billion On the market in March last year, there was a significant discount, since any sale would most likely throw off the platform's algorithms.
Instead, the value in the potential deal was the opportunity to capture the strong local brand of TikTok and its partners More than 100 million usersHe said.
However, while talks of selling TikTok have been growing, Beijing has been seen as such A big barrier To divest from BytdeDance.
However, Beijing recently signaled its openness to a deal that would see US companies take ownership of the platform.
“When it comes to actions such as operating and acquiring companies, we believe companies should decide them independently in accordance with market principles,” a Beijing spokesman said Monday when asked about President Donald Trump's proposal.
According to O'Leary, any potential sale of ByteDance is still expected to be negotiated between Trump and Chinese President Xi Jinping.
“With TikTok, I have the right to sell it or shut it down, and we will make that decision and we may have to get approval from China as well,” Trump told reporters after his inauguration.
The president reportedly indicated while signing the executive order that he could Imposing tariffs on China If Beijing fails to agree to a US deal with TikTok. He said on Tuesday that he would study the possibility of that happening Tesla CEO Elon Musk Or the head of the oracle Larry Ellison Buy TikTok.
Meanwhile, O'Leary told CNBC he is still in Washington working on a potential TikTok deal with US lawmakers.
