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Business tycoons, for example Elon Musk should be prepared to spend tens of millions of dollars on TikTok’s US operations if parent company ByteDance decides to sell them.
TikTok is facing a possible ban in the US The Supreme Court decides Protecting a national security law, such as service providers the apple and google Hosting the application after the Sunday deadline would be penalized. ByteDance has not indicated that it will sell the US unit of the app, but the Chinese government has taken into account A plan that would see Musk X acquire the operations under several scenarios considered, Bloomberg News notify monday
If ByteDance decides to sell, potential buyers may have to spend between $40 billion and $50 billion. That is the assessment of CFRA Research Senior Vice President Angelo Zino appreciated For TikTok’s US operations. Zino based its valuation on estimates of TikTok’s US user base and revenue compared to rival apps.
TikTok has about 115 million monthly users in the US, which is slightly behind Instagram’s 131 million, according to estimates by the market intelligence firm. Sensor tower. This puts TikTok ahead Snapchat, Pinterest and RedditWith monthly US mobile user bases of 96 million, 74 million and 32 million, respectively, according to Sensor Tower.
Zino’s estimate, however, is down from 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. signed legally next month.
The lowered estimate is due to TikTok’s current geopolitical situation and the fact that “industry multiples have come in a little bit” since March, Zino told CNBC in an email. Zino’s calculations do not include TikTok’s valuable recommendation algorithms, which a US acquirer would not get as part of a deal, with the algorithms and their alleged ties to China central to the US government’s case that TikTok poses a national security threat.
Bloomberg Intelligence analysts estimate TikTok’s US operations to be between $30 billion and $35 billion. That’s the calculation they published in July, saying then that the value of the unit would be “discounted for being a forced sale”.
Analysts at Bloomberg Intelligence noted that finding a buyer for TikTok’s US operations while simultaneously paying for the transaction and facing regulatory scrutiny over data privacy is a tough sell. It could also be difficult for a buyer to expand TikTok’s ad business, they wrote.
A consortium of businessmen, including a billionaire Frank McCourt and O’Leary Ventures president Kevin O’Leary made an offer to buy TikTok from ByteDance. O’Leary has previously said the team would be willing to pay 20 billion dollars Algorithm-free access to US assets.
Unlike Musk’s offer, O’Leary’s offer would be free of the group’s regulatory scrutiny, O’Leary said Monday. the conversation with Fox News.
O’Leary said he’s a “huge Elon Musk fan,” but “the idea that regulators, even under the Trump administration, would allow this is pretty slim.”
TikTok, X and O’Leary Ventures did not respond to requests for comment.
