Earlier this week, the US House of Representatives passed a bill requiring ByteDance, owner of the Chinese social media platform TikTok, to sell the app or be banned in the country over concerns about misuse of the user data by Beijing.
The bill has sparked major protests across the country.
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 the value of TikTok's U.S. operations at $100 billion, and predicts it will potentially fall to $40 billion if a purchase 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 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 users in the United States, 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 monthly active users in the US in 2016, indicating significant growth in a short time.
However, TikTok suitors require a strong stomach due to the lack of profitability and migraines associated with owning and operating a popular social media company.
axiosBusiness 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 the most likely buyers of TikTok.
This is due to their deep knowledge of the company, their ability to execute a stock trade, and the potential involvement of influencers.
Unfortunately, due to antitrust concerns, we can't expect any of the big tech companies (Google, Amazon, Apple, Meta, and Microsoft) to bid, and other Fortune 50 players are unlikely to show interest.
