Who will buy TikTok and for how much?

US House of Representatives have passed a bill that requires China's TikTok owner ByteDance to sell the app or get banned in the country
A representational image. — Pixabay
A representational image. — Pixabay

The newly-passed bill by the United States House of Representatives has triggered a debate across the nation as it requires China’s social media platform TikTok owner ByteDance to sell the app or get banned in the country

The move was a result of allegations that China is misusing the data. Now the question is will the Senate pass the bill? And if yes, who will buy it and for how much?

According to a report published in Axios, Wedbush analyst Dan Ives estimated TikTok’s US operations value at $100 billion, predicting that it will likely drop to $40 billion if a buyout excludes the company’s addictive algorithm.

It should be noted that in 2023 TikTok’s US revenue was between $16 billion and $20 billion; however, CEO Shouz Zi Chew claimed that the company was in the red due to heavy spending on data storage, e-commerce expansion, and a data security project with Oracle.

According to eMarketer, TikTok has 170 million monthly user, which surpassed Facebook, Instagram, Snapchat, or X (formerly knowns as Twitter).

The app reportedly generated only $200 million to $300 million in 2019, compared to 11 million US monthly active users in 2016, indicating a significant growth spurt in a short time.

However, TikTok suitors require a strong stomach due to unprofitability and migraine headaches associated with owning and operating a popular social media company.

Axios' business 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 most likely buyers for TikTok.

This is due to their deep understanding of the company, ability to execute a share swap, and potential influencer involvement.

Unfortunately, due to antitrust concerns, we can’t expect any Big Tech companies — Google, Amazon, Apple, Meta, and Microsoft — to bid and it's unlikely that other Fortune 50 players would show interest.