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Could Musk really buy US TikTok operations?

admin by admin
January 14, 2025
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Could Musk really buy US TikTok operations?
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Investing.com — Chinese officials are reportedly exploring the possibility of selling TikTok’s US operations to billionaire Elon Musk if the platform cannot evade an impending ban, according to Bloomberg News. Beijing still prefers that TikTok remain under its parent company, ByteDance, the report said. 

Per Bloomberg, the sale could occur through a government-led arrangement or a competitive process, indicating that ByteDance may no longer have full control over the app’s future in the US.

“In a contingency plan this is likely one of many options that ByteDance is exploring with the Supreme Court case awaiting final judgment and the January 19th TikTok ban or divest deadline looming,” Wedbush analysts led by Daniel Ives commented.

“Given the strong and growing alliance between Trump and Musk this is not a total shock route as behind the scenes the Trump White House is looking at alternatives if the Supreme Court upholds the ban.”

Moreover, Beijing and Xi Jinping share a strong rapport with Elon Musk, which could provide additional assurance in this potential deal or partnership as a means to prevent a TikTok ban, analysts added.

If ByteDance were to sell TikTok’s US operations, Wedbush’s team believes the deal would likely exclude the algorithm, which ByteDance views as its core asset. Analysts estimate the sale price could range between $40 billion and $50 billion.

Such a move would significantly boost the value of the Twitter/X platform, and Elon Musk might seek external investments to secure this valuable acquisition. Analysts also point out the possibility of a joint partnership rather than a full sale, with Musk playing a key role, potentially preventing a complete ban of TikTok in the US.

“There is much more at stake here than just TikTok’s fate….as the US/China high tension relationships are clearly at play heading into a very important tariff discussion/negotiations for the Trump Administration in the months ahead,” analysts continued.

The US Justice Department has labeled TikTok a “national security threat” due to its Chinese parent ByteDance’s potential access to US user data.

In April 2024, Congress passed a bill requiring ByteDance to secure a US-approved buyer within nine months or face a nationwide ban. This deadline coincides with President Trump’s inauguration on January 20, 2025.

While Trump opposes the ban and has called on the Supreme Court to delay it, he may direct the Justice Department not to enforce the law, avoiding fines for tech companies like Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOGL). The president-elect met with TikTok CEO Shou Zi Chew last month.

Wedbush analysts argue that ByteDance “will never sell” TikTok with its algorithm, significantly reducing the platform’s value in any sale, whether to Elon Musk or another buyer.

This post appeared first on investing.com

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