The popular content creating platform TikTok might be banned on January 19 under a US Federal law that forces such mediums to stir away from China-based parent company ByteDance, or shut down its operations in the States.
The United States Supreme Court on Friday upheld the law banning TikTok due to concerns over national security amid Chinese ownership of the video-sharing platform.
It is most likely that an American ownership is the key card to saving the app, preventing millions of US citizens from getting barred from using the app. However, TikTok’s parent company ByteDance has repeatedly said that it is not planning to selling the platform.
How much is TikTok worth?
Experts and analysts have valued the video-sharing/content-creating platform somewhere between $100-200 billion.
Wedbush analyst Dan Ives estimated that the app is worth “well north of $100 billion” and with its secret algorithm, the value might potentially rise up to $200 billion in a “best case scenario”.
However, experts have also noted that it is highly unlikely of the Chinese government to approve a sale that includes the coveted algorithm as well.
“Without the algorithm it’s $40 billion to $50 billion,” Ives was quoted as saying by The Associated Press. He expressed that he does not believe that ByteDance and China would sell TikTok with the algorithm.
Attorneys for the Chinese-owned application have claimed that it is impossible to divest the platform commercially and technologically.
They further said that any sale of TikTok without its secret sauce, that Chinese authorities would probably block in case of any divestiture plan, would make the US version of the app into an island disconnected from global content.
Notably, US officials have warned that the proprietary algorithm of TikTok might be vulnerable to manipulation at the hands of Chinese authorities, who can use it to modify the content on the platform in a way that would be difficult to detect.
In court documents, TikTok and ByteDance counsel have mentioned that a one-month shutdown would likely lead to a 29 per cent drop in the platform’s global advertising revenue for the year, a Forbes report said.
DA Davidson analyst Gil Luria said, “TikTok would need to create a lot of new infrastructure that it would lose from its parent company in a potential spinoff.”
“The price would also be limited by the accelerated process and need to buy the entire franchise, as opposed an IPO, which significantly limits the number of potential buyers,” Luria was quoted as saying by Forbes.
Potential buyers
Real estate mogul and billionaire businessman Frank McCourt and internet advocacy group had recently announced its proposal to buy TikTok from ByteDance, with Shark Tank investor Kevin O’Leary joining the effort.
McCourt’s group had said in December that it had secured several investors’ commitments which combined would be more than $20 billion in capital, without disclosing any other major details.
McCourt, the former LA Dodgers owner, said that in case of a sale, he plans to restructure TikTok and give more authority to people “over their digital identities and data” by moving the platform to an open-source protocol that allows consumers to have more transparency.
Former treasury secretary Steven Mnuchin has also shown interest in purchasing TikTok. Shortly after the Congress passed the ban on the platform, Mnuchin had told CNBC that he began creating an investor group that would possibly buy the social media company.
At the time of holding the treasury secretary office, Mnuchin had helped the Donald Trump administration to crack a deal in 2020 that would have had US corporations Oracle and Walmart take large stake in TikTok on national security grounds.
Meanwhile, Tesla CEO Elon Musk also figured in the several names being floated as possible buyers of TikTok. Mr Beast, aka Jimmy Donaldson, and former Blizzard-Activision CEO Bobby Kotick might also show interest in purchasing the video-sharing platform.
(with AP inputs)
