May Musk actually purchase US TikTok operations?

Investing.com — Chinese language officers are reportedly exploring the potential for promoting TikTok’s US operations to billionaire Elon Musk if the platform can not evade an impending ban, in line with Bloomberg Information. Beijing nonetheless prefers that TikTok stay underneath its father or mother firm, ByteDance, the report mentioned. 

Per Bloomberg, the sale may happen by way of a government-led association or a aggressive course of, indicating that ByteDance could not have full management over the app’s future within the US.

“In a contingency plan that is seemingly considered one of many choices that ByteDance is exploring with the Supreme Court docket case awaiting ultimate judgment and the January nineteenth TikTok ban or divest deadline looming,” Wedbush analysts led by Daniel Ives commented.

“Given the sturdy and rising alliance between Trump and Musk this isn’t a complete shock route as behind the scenes the Trump White Home is alternate options if the Supreme Court docket upholds the ban.”

Furthermore, Beijing and Xi Jinping share a robust rapport with Elon Musk, which may present extra assurance on this potential deal or partnership as a method to stop a TikTok ban, analysts added.

If ByteDance have been to promote TikTok’s US operations, Wedbush’s staff believes the deal would seemingly exclude the algorithm, which ByteDance views as its core asset. Analysts estimate the sale value may vary between $40 billion and $50 billion.

Such a transfer would considerably increase the worth of the Twitter/X platform, and Elon Musk would possibly search exterior investments to safe this useful acquisition. Analysts additionally level out the potential for a joint partnership reasonably than a full sale, with Musk enjoying a key function, probably stopping an entire ban of TikTok within the US.

“There may be rather more at stake right here than simply TikTok’s destiny….because the US/China excessive stress relationships are clearly at play heading into an important tariff dialogue/negotiations for the Trump Administration within the months forward,” analysts continued.

The US Justice Division has labeled TikTok a “nationwide safety risk” resulting from its Chinese language father or mother ByteDance’s potential entry to US consumer information.

In April 2024, Congress handed a invoice requiring ByteDance to safe a US-approved purchaser inside 9 months or face a nationwide ban. This deadline coincides with President Trump’s inauguration on January 20, 2025.

Whereas Trump opposes the ban and has referred to as on the Supreme Court docket to delay it, he could direct the Justice Division to not implement the regulation, avoiding fines for tech firms like Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOGL). The president-elect met with TikTok CEO Shou Zi Chew final month.

Wedbush analysts argue that ByteDance “won’t ever promote” TikTok with its algorithm, considerably decreasing the platform’s worth in any sale, whether or not to Elon Musk or one other purchaser.