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Business magnates like Elon Musk should be prepared to spend tens of billions of dollars on TikTok’s US operations should parent company ByteDance decide to sell.
TikTok is considering a possible ban in the US if the The Supreme Court decides advocate for a national security law in which service providers like Apple and Google You would be penalized for hosting the application after the Sunday deadline. ByteDance has not indicated that it will sell the US unit of the app, but the Chinese government has considered a plan in which X owner Musk would acquire operations, as part of several scenarios under consideration, Bloomberg News reported Monday.
If ByteDance decides to sell, potential buyers could have to spend between $40 billion and $50 billion. That is the assessment that the senior vice president of CFRA Research, Angelo Zino, has. My dear for TikTok’s US operations. Zino based its valuation on estimates of TikTok’s US user base and revenue compared to rival apps.
TikTok has about 115 million monthly mobile users in the U.S., slightly behind Instagram’s 131 million, according to an estimate from the market intelligence firm. Sensor tower. That puts TikTok ahead snapchat, Pinterest and redditwhich have monthly US mobile user bases of 96 million, 74 million and 32 million, according to Sensor Tower.
Zino’s estimate, however, is lower than the more than $60 billion he estimated for the unit in March 2024, when the House passed President Joe Biden’s initial national security bill. signed It became law the following month.
The reduced estimate is due to TikTok’s current geopolitical situation as “industry multiples have increased a bit” since March, Zino told CNBC in an email. Zino’s estimate does not include TikTok’s valuable recommendation algorithms, which a US acquirer would not get as part of a deal, with the algorithms and their alleged ties to China being central to the US government’s case that TikTok poses a threat to the national security.
Bloomberg Intelligence analysts estimate that TikTok’s operations in the United States will range between $30 billion and $35 billion. That’s the estimate they published in July, saying at the time that the value of the unit would be “discounted as it was a forced sale.”
Bloomberg Intelligence analysts noted that finding a buyer for TikTok’s U.S. operations that can afford the transaction and deal with the accompanying regulatory scrutiny over data privacy makes the sale challenging. It could also make it difficult for a buyer to expand TikTok’s advertising business, they wrote.
A consortium of businessmen including a billionaire Frank McCourt and O’Leary Ventures president Kevin O’Leary made an offer to buy TikTok from ByteDance. O’Leary has previously said the group would be willing to pay up to $20 billion acquire US assets without the algorithm.
Unlike a Musk bid, the O’Leary group’s bid would be free of regulatory scrutiny, O’Leary said Monday. interview with Fox News.
O’Leary said he is “a big fan of Elon Musk,” but added that “the idea that the regulator, even under the Trump administration, would allow this is pretty remote.”
TikTok, X and O’Leary Ventures did not respond to requests for comment.
