TikTok’s Uncertain Future: A Deal in the Works?
As the deadline for a ban on TikTok looms, Canadian investor Kevin O’Leary remains interested in a potential deal, but current laws pose a significant obstacle. President Donald Trump’s recent executive order delayed the imposition of a law that would effectively ban TikTok in the US, allowing for further negotiations.
A 50/50 Deal: A Possibility?
O’Leary, known for his role in ABC’s “Shark Tank,” expressed enthusiasm for a joint venture with 50% American ownership, but emphasized that such a deal would need to comply with the Supreme Court’s ruling. He, along with Project Liberty Founder Frank McCourt, offered ByteDance $20 billion in cash to buy TikTok, excluding the platform’s algorithm, which has been a key point of scrutiny from US lawmakers.
Legal Uncertainty Surrounds TikTok Deal
Law experts agree that the legal status of TikTok and Trump’s executive order remains uncertain. The order may not comply with the statute, and any efforts to make a TikTok deal could face challenges. A federal court could find that the order violates the law and invalidate it, although such an action could take a long time if the government appeals to the Supreme Court.
A Potential Sale: Valuation and Barriers
O’Leary believes TikTok could fetch $20-$30 billion on the market, a significant discount given any sale would likely exclude the platform’s algorithms. The value in a potential deal lies in gaining the strong domestic brand of TikTok and its over 100 million users. However, Beijing’s initial reluctance to approve a divestment posed a significant barrier, although China has recently signaled openness to a deal.
Negotiations: A Complex Web
Any potential sale of ByteDance is still expected to be negotiated between Trump and Chinese President Xi Jinping. The President has suggested that he could impose tariffs on China if Beijing fails to approve a US deal with TikTok. Meanwhile, O’Leary is working with US lawmakers to finalize a deal.
The Future of TikTok: Uncertainty Reigns
As the situation unfolds, one thing is clear: the future of TikTok remains uncertain. With legal hurdles, political negotiations, and financial complexities at play, it’s unclear what the outcome will be. One thing is certain, however: the stakes are high, and the world is watching.
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