Business moguls like Elon Musk may need to be ready to invest tens of billions of dollars in acquiring TikTok’s U.S. operations if ByteDance, the parent company, decides to sell. The potential ban facing TikTok in the U.S. could be upheld by the Supreme Court due to a national security law, which could penalize service providers like Apple and Google for hosting the app after the Sunday deadline. While ByteDance has not confirmed plans to sell the app’s U.S. unit, there have been considerations by the Chinese government for Musk to acquire the operations, as reported by Bloomberg News.
If ByteDance proceeds with the sale, potential buyers might have to spend between $40 billion and $50 billion. This valuation was estimated by Angelo Zino, Senior Vice President of CFRA Research, based on TikTok’s U.S. user base and revenue compared to other similar apps. TikTok has approximately 115 million monthly mobile users in the U.S., slightly trailing behind Instagram’s 131 million, according to Sensor Tower.
Zino’s valuation has decreased from over $60 billion in March 2024, attributed to TikTok’s current geopolitical challenges and industry multiples. The estimate does not include TikTok’s valuable recommendation algorithms, which a U.S. buyer would not acquire due to concerns about their ties to China and national security implications.
Bloomberg Intelligence analysts have estimated the value of TikTok’s U.S. operations to be between $30 billion and $35 billion, noting that the forced sale could impact the value. Finding a buyer who can afford the transaction and navigate regulatory scrutiny on data privacy poses a challenge, potentially hindering the expansion of TikTok’s advertising business.
A consortium led by billionaire Frank McCourt and O’Leary Ventures Chairman Kevin O’Leary has expressed interest in acquiring TikTok from ByteDance, offering up to $20 billion for the U.S. assets excluding the algorithm. O’Leary highlighted that their bid would not face the same regulatory hurdles as a potential bid from Musk, emphasizing the challenges associated with regulatory approval.
TikTok, Musk, and O’Leary Ventures have not provided comments on the matter.
