TikTok US Operations Bidders

Growing Acquisition Interest in US TikTok Operations

Source:  TikTok Logo

Clock Is Ticking for Microsoft and Reportedly Twitter

According to The Wall Street Journal, Twitter has approached TikTok's Chinese owner ByteDance to buy the US operations of the video sharing app company with a global user base of 800 million.  The talks are reportedly at the preliminary stage and Twitter has made no formal announcement.  Meanwhile, Microsoft hopes to finalize an agreement to acquire TikTok's US, Canada, Australia and New Zealand by mid-September.  The moving force behind the acquisition scramble is President Donald Trump and his threat to ban Chinese owned TikTok from operating in the US.

Vulnerability of Amercans' Personal Data

TikTok has come under fire from US lawmakers, particularly President Trump and Treasury Secretary Steve Municin, about the vulnerability of Americans' private information to TikTok data collection,  The key issue is that ByteDance could be compelled by law to hand over American user information to the Chinese government.  President Trump has given ByteDance 45 days to agree to a sale of its US assets.

Intense Competition to Buy

First out of the gate on August 2, Microsoft announced its intentions to acquire the TikTok operations and is considered by some to be the frontrunner.  In Twitter's favor, it would likely face far less regulatory scrutiny than Microsoft and it would not be subject to any Chinese pressure as it has no operations in China.  But, for Twitter, it's a matter of finances.  TikTok's US operations are valued at $30 billion.  Twitter's market capitalization is $29 billion, so it would need to bring in investment partners to make the deal work.  Several investment groups are expressing interest.  Microsoft's market cap is $1.6 trillion.  Before Twitter reportedly entered the competition, President Trump expressed support of Microsoft cutting a deal.  But, President Trump and his family are big users of Twitter, making many Tweets on a daily basis. He could also support a Twitter acquisition.

Why Is TikTok So Valuable?

TikTok and its video sharing app are experiencing explosive growth.  800 million global users now with that base constantly expanding.  It is a great fit for Twitter and its social media platform.  And it's a fascinating play for Microsoft which has primarily focused on business customers.  But Microsoft is building a portfolio of consumer facing businesses like Xbox and LinkedIn.  For Microsoft, TikTok could prove wildly successful.  The time is ticking on this battle.  President Trump has given ByteDance until September 15 to sell its US assets or be banned.  


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