Trump said he’d ban TikTok, so ByteDance agreed to divest its U.S. operations of the popular app. Here are three scenarios that could happen next.
As of today August 1st, 2020, Chinese tech company ByteDance, which owns TikTok, has agreed to divest its operations of the internet sensation, Reuters learned from two people familiar with the matter. TikTok has an estimated 800 million monthly active users worldwide and estimates have the app at roughly 70 million monthly active users in the United States alone. This news comes after President Donald Trump told reporters late-Friday that he planned to ban TikTok as soon as today Saturday August 1st. Forbes reported yesterday that Microsoft was in talks with ByteDance to purchase TikTok, which is reportedly valued in the ballpark of $50 billion. Based on current conversations, the most likely next course of action is ByteDance will exit TikTok entirely (as opposed to maintaining a minority stake in the company as it had intended, before Trump’s White House shot the idea down due to national security concerns). In my view, there are three likely places the TikTok acquisition conversations could end up. Most coverage around TikTok’s possible acquisition has centered around the possibility of Microsoft being the buyer. CNBC learned from a credible source that Microsoft had been exploring the possibility of buying TikTok for a while now—and that “TikTok would complement Microsoft’s existing social media asset, LinkedIn.” At the moment, Microsoft has $136 billion in cash and liquid investments; that financial position makes it the easiest for the company to pay the big price tag among its tech peers.
