The popular content creation platform TikTok could face a ban in the U.S. on January 19 under a federal law requiring platforms to sever ties with their China-based parent company, ByteDance, or cease operations in the country. The U.S. Supreme Court recently upheld this law due to national security concerns related to TikTok’s Chinese ownership.
Experts believe that American ownership might be the key to saving the app, thereby allowing millions of U.S. users to continue accessing it. However, ByteDance has consistently stated it has no plans to sell TikTok after the ban news. Analysts have estimated TikTok’s value between $100 billion and $200 billion, with Wedbush analyst Dan Ives suggesting it could reach $200 billion if its proprietary algorithm remains intact. Without this algorithm, its value could drop significantly to $40-50 billion.
Legal representatives for TikTok argue that separating the platform from its parent company is not feasible both commercially and technologically. They also warn that any sale without the algorithm—likely to be blocked by Chinese authorities—would isolate the U.S. version of TikTok from global content. U.S. officials have raised concerns about the algorithm’s potential manipulation by Chinese authorities.
Court documents reveal that a one-month shutdown could result in a 29% decline in TikTok’s global advertising revenue for the year, according to Forbes. Analyst Gil Luria from DA Davidson noted that a spin-off would require TikTok to develop significant infrastructure lost from its parent company, and the process would limit the number of potential buyers due to its accelerated timeline.
Potential buyers include real estate billionaire Frank McCourt and his investor group, who have reportedly secured over $20 billion in capital. McCourt plans to restructure TikTok to give users more control over their digital identities by shifting to an open-source protocol. Former U.S. Treasury Secretary Steven Mnuchin has also expressed interest, forming an investor group to potentially acquire TikTok. Other notable figures like Tesla CEO Elon Musk, YouTuber Mr. Beast, and former Blizzard-Activision CEO Bobby Kotick have been mentioned as possible buyers.
