ByteDance might consider selling TikTok after the Biden Administration warned it, saying the app could face a nationwide ban.
(Photo : Photo by GREG BAKER/AFP via Getty Images)
The headquarters of ByteDance, the parent company of video sharing app TikTok, is seen in Beijing on September 16, 2020. - Silicon Valley tech giant Oracle is "very close" to sealing a deal to become the US partner to Chinese-owned video app TikTok to avert a ban in the United States, President Donald Trump said on September 15.
Recently, a TikTok spokesperson claimed that the U.S. government demanded ByteDance sell TikTok. If the company doesn't comply, then the social media app will be banned in the United States.
However, the Biden Admin didn't provide a specific deadline for its demand, as reported by NPR.
If the U.S. government is really serious with its plan, then ByteDance really needs to sell TikTok. But, will other companies purchase the popular video platform?
What If ByteDance Sells TikTok?
According to Business Insider's latest report, potential buyers of TikTok are not that many. Tech experts said that the list of companies that could buy the social media platform is small.
(Photo : Photo Illustration by Drew Angerer/Getty Images)
In this photo illustration, the download page for the TikTok app is displayed on an Apple iPhone on August 7, 2020 in Washington, DC. On Thursday evening, President Donald Trump signed an executive order that bans any transactions between the parent company of TikTok, ByteDance, and U.S. citizens due to national security reasons.
Also Read: New Zealand Joins TikTok Ban-wagon on Government Devices Due to Security Concerns
Among these are Microsoft and Oracle. Other potential buyers were not named as of writing.
Aside from individual buyers, tech enthusiasts also believe that TikTok could be purchased by a private-equity firm or a consortium of firms.
Some analysts predicted that once TikTok is purchased, it could be kept as a standalone company, which will be taken public via an initial public offering.
However, purchasing TikTok is a complicated acquisition. This is because TikTok's U.S. assets are expensive; ranging between $40 billion to $100 billion.
Other Outcomes Aside from Selling
Various tech experts believe that selling TikTok is not the only option for ByteDance to avoid the possible nationwide ban by the U.S. government.
Another solution would be a spin-off of TikTok's U.S. business into its own entity, which could be powered by private-equity firms.
Patrick Moorhead, Moor Insights and Strategy's CEO, said a private-equity deal where multiple companies will buy TikTok is among the right things to do.
"I think this gets sold to a holding company and likely private equity and this company goes out and does an IPO," he added.
Other stories we recently wrote about TikTok:
The U.S. Justice Department decided to conduct a TikTok probe over a journalist spying case. We also reported that China wants the U.S. and other countries to treat TikTok fairly.
For more news updates about TikTok and other popular online apps, always keep your tabs open here at TechTimes.
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