There is a new living room game at Wall Street: guess Tiktok’s next owner.
President Trump signed an executive order in January which delayed the application of a law that prohibited the popular video app. Based on the order, the app must now be sold to a non -Chinese owner at the beginning of April.
Since signed the order, Mr. Trump has dropped a burst of tips that are sometimes conflicting on how the next few weeks could take place: he suggested wanting a war of offers; He said the United States should have part of the app; He appointed Microsoft and Elon Musk as potential buyers, even if others have raised their hands.
But the mechanics of a potential sale are still obscure.
ByTedance, the owner of Tiktok, said for years that he cannot sell the app, in part because the Chinese government would not allow the export of its important important algorithm.
And it is not even clear that Tiktok’s American investors are interested in a sale.
“There are a number of alternatives that we can speak with President Trump and his short team of selling the company that allow the company to continue to operate, perhaps with a change of control of some kind, but unless you have to Selling, “Bill Ford, CEO of General Atlantic, told CNBC. General Atlantic, a private equity company, is an investor in bytedance.
Here’s what we know what will happen after:
Who wants to buy Tiktok?
Trump recently launched a series of names in public, including Musk, Microsoft and Oracle. In 2020, Microsoft, Oracle and Walmart tried to buy Tiktok before those interviews were pieces.
Other potential bidders include Jesse Tinsley, the founder of the paying company employer of Lavoro.com, who has put together a consortium that includes the managing director of Roblox, the video game platform.
The “Shark Tank” star Kevin O’Leary is part of an offer of billionaire Frank McCourt, who tried to buy Tiktok without his algorithm coveted. The evaluation of its $ 20 billion bankers is considered much lower than what Tiktok could recover with its recommendation technology.
The YouTube star Mr. Beast, whose real name is Jimmy Donaldson, was also in negotiations with “different bidder potentials” to be a strategic partner in an acquisition, according to Matthew Hiltzik, spokesperson. (His role would not be to finance a purchase, as some reports hypothesized.)
Mr. Musk, of course, bought Twitter, now called X, in 2022. And the Chinese government could be more willing to sell him, given the large deal that Tesla does in China. But the billionaire did not comment if he wants to buy Tiktok.
Microsoft refused to comment. Oracle and Mr. Musk did not respond to a commentary request.
Tiktok and Bytedance have not commented on if they are engaged in sales interviews.
Who will guide the negotiations for an agreement and why?
Mr. Trump holds court courts, and it is unlikely that whoever Try to conclude an agreement without a discreet degree of trust that would have supported a transaction. Mr. Ford of General Atlantic told Davos that he would negotiate with Mr. Trump and the Treasury Secretary Scott Beesent, who guides the group of interactions that examines the agreements for concerns for national security.
Ford has said that the advice and direction of Bessent and Bytedance will be part of the interviews and described his company as “ready to commit”.
It will also be important that the fans feel sure they have support from the Chinese government. China has resisted to give up the control of Tiktok. He has updated his export control rules in 2020, allowing them to block the export of the algorithm which is the key to making Tiktok work. While some potential buyers, such as Mr. McCourt, said they wanted to buy Tiktok without the algorithm, they would have purchased a significantly reduced product.
What did Trump say about what he wants?
Any agreement will need the approval of Mr. Trump and said he is anxious to make one. He told journalists last month that there was “a lot of interest” in Tiktok.
He outlined the contours of the type of agreement he wants to hit: “What I am thinking of saying is to buy it and give half the United States of America,” he said.
On Monday, Trump also signed an executive order aimed at creating a sovereign fund of the United States and suggested that the fund could be a potential investor in the agreement with Tiktok.
It is not clear, however, if such a structure would solve the concerns on national security that led the congress to approve the law, which include fears that bytedance could deliver the sensitive user data of Tiktok to the Chinese government or that Beijing could use the app To spread propaganda. It is also not clear in which form the United States could become an investor.
The law makes illegal for companies updating or distributing Tiktok in the United States unless there is a “qualified sale” of the bytedance app. He says that Tiktok cannot maintain an operational relationship with any company owned by Chinese or controlled by Chinese.
What did investors say?
The law states that Tiktok can no longer be controlled by a Chinese company or rely on a Chinese company for its recommendation algorithm or for sharing data.
But as indicated by the comments of Mr. Ford of General Atlantic, investors are exploring options that would eliminate total sale. An agreement forced by political pressure would most likely require a strong cut on the value of their investments, analysts say.
But it is not clear that the other options, which could include the involvement of new investors or that US investors exchange their investment in bytes for a participation in Us Tiktok, would face the national security issues identified by law. The law prevents a person or people in China from holding, directly or indirectly, over 20 percent of Tiktok.
What could a sale be hindered?
Is there a fundamental question that even Tiktok has raised in the judicial documents: can the US activities of Tiktok operate if it is cut out of its global infrastructure? Tiktok said that such a sale was not “commercially, technologically or legally feasible”. This is partly because it is unlikely that China allows any American buyer to take Tiktok’s algorithm. It is also because most of the technological infrastructures of Tiktok is hosted outside the United States.
There is also the question if Tiktok remains desirable as it was in 2020. Large technological companies such as Microsoft, who tried to buy Tiktok in 2020, committed themselves to spending billions in the race for artificial intelligence. An acquisition of Tiktok, therefore, would be a significant change in the strategy, according to analysts.
Buy any Social media society is often a difficult proposal, given the speed with which it can fall out of dysgrazia. Snap, an extremely popular time among teenagers, now exchanges below the price he sold in his initial public offer in 2017 – an example of how teenagers and investors can be traced drastically.
The purchase of Tiktok would also be expensive, making it a purchase that only a handful of companies could make alone. And those who are large enough to do it, like Google and Meta, would probably face antitrust control if they had purchased the app.
Tiktok will be the same if it sells?
We don’t know. A sale could solve Tiktok’s legal problems, but it could also change the app that users know today.
Some Tiktok users have suggested in the past that, in the same way that X turned under the ownership of Mr. Musk, Tiktok could change under a new leader. In the case of X, many users and advertisers have fled the app.