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Business tycoons such as Elon Musk should be prepared to spend tens of billions of dollars on TikTok’s US operations if parent company ByteDance decides to sell.
TikTok is looking at a potential ban in the US when The Supreme Court decides comply with national security law in which service providers such as an apple and Google will be penalized for posting an application after the Sunday deadline. ByteDance did not reveal that the US division of the app would be sold, but the Chinese government considered a plan that would see X owner Musk acquire the operations, among several scenarios being considered, Bloomberg News reported Monday.
If ByteDance decides to sell, potential buyers may have to shell out between $40 billion and $50 billion. That’s the assessment of CFRA’s senior vice president of research, Angelo Zino is evaluated for TikTok’s US operations. Zino based his estimate on an assessment of TikTok’s user base and TikTok’s US revenue compared to competing apps.
TikTok has about 115 million monthly mobile users in the U.S., slightly behind Instagram’s 131 million, according to estimates from a market research firm Sensory tower. This puts TikTok ahead Snapchat, Pinterest and Redditwhich have monthly US mobile user bases of 96 million, 74 million and 32 million, respectively, according to Sensor Tower.
However, Zino’s estimate was down from the more than $60 billion he estimated for the division in March 2024, when the House passed the initial national security bill that President Joe Biden signed take effect next month.
The downgrade is due to TikTok’s current geopolitical situation and the fact that since March, “industry metrics have picked up a bit,” Zino told CNBC in an email. Zino’s valuation does not include TikTok’s valuable recommendation algorithms that a US buyer would not receive as part of the deal, with the algorithms and their alleged ties to China central to the US government’s argument that TikTok poses a national security threat.
Analysts at Bloomberg Intelligence estimate TikTok’s US business in the range of $30 billion to $35 billion. That’s the estimate they released in July, saying at the time that the unit’s value would be “reduced due to the forced sale.”
Bloomberg Intelligence analysts noted that finding a buyer for TikTok’s U.S. operations that can afford the deal and handle the accompanying data privacy regulatory scrutiny makes a sale difficult. It could also make it more 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 chairman Kevin O’Leary made a bid to buy TikTok from ByteDance. O’Leary previously said the group would be willing to pay up to 20 billion dollars buy US assets without an algorithm.
Unlike Musk’s bid, O’Leary’s group’s bid will be free of regulatory scrutiny, O’Leary said Monday an interview from Fox News.
O’Leary said he was a “huge fan of Elon Musk” but added that “the idea that a regulator, even under the Trump administration, would allow this is pretty tenuous.”
TikTok, X and O’Leary Ventures did not respond to requests for comment.
