NEW YORK — The widely utilized social media platform TikTok faces a potential ban on January 19 due to a federal regulation that mandates the app to either divest from its Chinese parent company, ByteDance, or discontinue its operations within the United States.
There has been notable interest from various parties looking to acquire TikTok, however, ByteDance has consistently stated its unwillingness to sell the platform. Industry experts indicate that the Chinese government is not likely to approve any sale that would involve TikTok’s highly valued algorithm. Until the deadline arrives or the Supreme Court intervenes, discussions of a potential sale persist. Here’s what you should know:
What is TikTok’s estimated value?
According to Wedbush analyst Dan Ives, TikTok is valued at “considerably over $100 billion” when including its algorithm, and could even reach near $200 billion under optimal conditions. Ives added that without its algorithm, TikTok’s valuation might drop to between $40 billion to $50 billion, and he doubts that the Chinese entity and government would agree to a sale that includes the algorithm.
The legal representatives for TikTok and ByteDance have argued that a commercial and technological separation of the platform is unfeasible. They warn that selling TikTok without the prized algorithm—considered essential for its functioning—would result in a version that is isolated from global content, thereby compromising its utility. U.S. officials have been vocal about concerns regarding the proprietary algorithm being susceptible to manipulation by the Chinese government, which could influence user content in undetectable ways.
Who is actively pursuing the purchase of TikTok?
Frank McCourt, a billionaire businessman and former owner of the Los Angeles Dodgers, along with his internet advocacy organization, has made public their intention to buy TikTok from ByteDance. Alongside him, well-known Shark Tank investor Kevin O’Leary is also part of the initiative. Details regarding their proposal have not been disclosed. McCourt mentioned that if the acquisition is successful, he intends to revamp TikTok to enhance user control over their digital identity and information by transitioning it to an open-source setup for greater transparency.
Former Treasury Secretary Steven Mnuchin is also bidding to secure TikTok. Following Congress’s decision to impose a ban, he informed CNBC that he was in the process of forming an investor group aimed at acquiring the popular platform. However, specific details about the group’s members or TikTok’s estimated valuation have not been shared. While serving as Treasury Secretary, Mnuchin played a role in negotiating a deal during the Trump administration that involved Oracle and Walmart potentially taking significant stakes in TikTok due to national security concerns.
Several other prominent figures have been mentioned as possible buyers, including Elon Musk, CEO of Tesla, and Jimmy Donaldson (MrBeast), who recently hinted at his interest in pursuing such a deal on social media. The seriousness and progress of these potential buyers remain uncertain currently.
Can Trump play a role in the situation?
President-elect Donald Trump, due to assume office on January 20, has recently petitioned the court to pause the ban, allowing him time to pursue a “political resolution” during his expected second term. If the Supreme Court grants his request after analyzing the law, any immediate ban on TikTok could be postponed. The Supreme Court is anticipated to issue a ruling shortly.
Though the Trump transition team has not detailed how he plans to “save TikTok,” spokeswoman Karoline Leavitt stated in November his commitment to fulfill that promise. Once Trump is in office, it will be up to his Justice Department to enforce the law and take action against those who defy it. Recently, during a Senate confirmation hearing, Pam Bondi, who has been nominated by Trump as Attorney General, evaded questions concerning her stance on enforcing a TikTok ban.
