Possibility of Musk buying ‘golden asset’ TikTok high, tech expert says
As TikTok faces the prospect of a nationwide ban in the U.S. over security concerns unless its China-based parent company sells its U.S. business, one technology expert says Elon Musk is the most likely buyer.
The popular video sharing app went dark for U.S. users briefly over the weekend but was brought back online Sunday after then-U.S. president-elect Donald Trump said he would not enforce a law banning it as of Jan. 19 once he was inaugurated.
Dan Ives, global head of tech research at Wedbush Securities, told BNN Bloomberg in a Monday interview that TikTok is being used as a valuable chip in a “game of high stakes poker” between the U.S. and China.
“It was shut down on (former president Joe Biden’s) last day, Trump turns it back on and now the focus is on what will be a 90-day executive order to essentially find a buyer,” he said.
“There’s probably going to be 10 to 15 bids out there, we believe probably leading this would be (Elon) Musk and X, and I think ultimately US$40 billion to $50 billion is probably going to be the price tag.”
The law that triggered the ban was passed by a bipartisan majority in Congress last year and was signed by Biden in April. U.S. lawmakers had long cited risks associated with TikTok’s Beijing-based parent company ByteDance Ltd.’s access to American users’ data.
The ban seemed imminent last week when the U.S. Supreme Court upheld the law, but on Sunday Trump promised to sign an executive order immediately after his inauguration to give TikTok an additional 90 days to find a buyer.
Trump suggested in a social media post that a buyer purchase 50 per cent of the platform, creating a “joint venture,” which members of Trump’s team believe could satisfy U.S. legal requirements and appease both ByteDance and Chinese officials, Bloomberg News reported Sunday.
Ives said that Musk’s closeness to Trump and his ongoing business ties with China make him an obvious contender to make a deal.
“(Musk is) definitely the favourite… obviously because of where Musk sits in the Trump administration, officially or unofficially, and he’s the only one that would be hand-picked by Beijing to run this,” he said.
“And again, it’s going to be 50 per cent. The algorithm will probably be under some sort of oversight that obviously is going to have to be approved by the U.S. government.”
Ives said other major players such as Oracle Corp. or a consortium of tech firms could put forward bids of their own, but the list of companies that could realistically compete for partial ownership of the platform is short.
“There’s only a handful tech players that ultimately will probably win let’s call it 50 per cent of what’s a golden asset in terms of TikTok – 170 million (U.S.) users,” he said.
Ives argued that TikTok is just one part of what will be long and complex negotiations with China – one of a number of U.S. trade partners Trump has threatened with sweeping tariffs.
“This is all part of the broader U.S.-China negotiations. This is just one piece of what’s going to be clearly a soap opera going forward,” he said.
“Trump understands that (TikTok) needs to basically stay alive… with some sort off U.S. ownership. The last thing you want to see in what’s going to be a massive negotiation with China on tariffs is getting off on the wrong foot by essentially shutting down TikTok.”
With files from Bloomberg News
This article was first reported by BNN Bloomberg
