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Business tycoons such as Elon Musk It must be prepared to spend tens of billions of dollars for TikTok's US operations if parent company ByteDance decides to sell.
TikTok is staring at a possible ban in the US if The Supreme Court decides To support the National Security Act in which service providers such as apple and Google You will be penalized for hosting the application after the Sunday deadline. ByteDance did not indicate that it would sell the US unit of the app, but the Chinese government It was considered A plan under which owner X Musk would acquire operations, as part of several scenarios being considered by Bloomberg News I mentioned Monday.
If ByteDance decides to sell, potential buyers could have to spend between $40 billion and $50 billion. That's the assessment of Angelo Zino, senior vice president of research at CFRA estimated For TikTok's operations in the United States. Zeno based his assessment on estimates of TikTok's US user base and revenue compared to competing apps.
TikTok has about 115 million monthly mobile users in the United States, which lags slightly behind Instagram's 131 million, according to an estimate by the market intelligence firm. Sensor tower. This puts TikTok ahead of the curve Snapchat, Pinterest and Redditwhich has U.S. mobile monthly user bases of 96 million, 74 million, and 32 million, according to Sensor Tower.
However, Zeno's estimate is less than the more than $60 billion he estimated for the unit in March 2024, when the House passed President Joe Biden's initial national security bill. I fell law the following month.
The low estimate is due to TikTok's current geopolitical impasse and because “industry complications have come in a bit” since March, Zeno told CNBC in an email. Zeno's estimate does not include TikTok's valuable recommendation algorithms, which a US takeover company would not acquire as part of a deal, as the algorithms and their alleged ties to China are central to the US government's case that TikTok poses a national security threat.
Analysts at Bloomberg Intelligence estimate that TikTok's US operations are worth between $30 billion and $35 billion. That's the estimate they published in July, saying at the time that the value of the unit “will be discounted as it is a forced sale.”
Finding a buyer for TikTok's U.S. operations that can afford the deal and deal with the regulatory scrutiny that accompanies data privacy makes a difficult sale, Bloomberg Intelligence analysts noted. It could also make it difficult for a buyer to expand TikTok's advertising business, they wrote.
A group of businessmen including a billionaire Frank McCourt O'Leary Ventures president Kevin O'Leary has made an offer to buy TikTok from ByteDance. O'Leary had previously said the group would be willing to pay up to 20 billion dollars To get US assets without the algorithm.
O'Leary said in a statement on Monday that unlike Musk's bid, the O'Leary Group's bid would be free of regulatory scrutiny. interview With Fox News.
O'Leary said he was a “huge fan of Elon Musk,” but added that “the idea that the regulator, even under the Trump administration, would allow this is very slim.”
TikTok, X and O'Leary Ventures did not respond to requests for comment.
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