The US House of Representatives passed a bill that, if approved, would force ByteDance to sell TikTok. Here’s one possible buyer.
Former Treasury Secretary Steven Mnuchin said he’s gathering a group of investors to buy TikTok in case of a US ban, CNBC reported Thursday. TikTok is one of the world’s largest social networks, owned by Beijing-based ByteDance.
On Wednesday, the House of Representatives passed a bill forcing ByteDance to sell TikTok’s American assets to a US firm or face a nationwide ban.
The bill - dubbed Protecting Americans from Foreign Adversary Controlled Applications Act - will go into the hands of the Senate. Senior equity analyst at Wedbush Securities Dan Ives said there’s a 25% chance of the bill becoming law.
The bill came after a thorough investigation by the US government into TikTok’s alleged security breach. According to the US government, TikTok collects sensitive data and sends it to China, where it is available to the Chinese government.
TikTok and ByteDance vehemently denied these allegations, saying that user data remains in the United States and inaccessible from the parent company. TikTok is banned in China, where a similar app called Douyin is available instead.
Chinese foreign ministry spokesperson Wang Wenbin said this decision “will inevitably come back to bite the United States itself”. “This kind of bullying behavior that cannot win in fair competition,” Wang said, “disrupts companies’ normal business activity, damages the confidence of international investors in the investment environment, and damages the normal international economic and trade order.”
The best offer
Meanwhile, American financiers and tech companies are already plotting the acquisition of TikTok if and when the bill is enforced.
Steven Mnuchin, Treasury Secretary under the Trump administration, is reportedly putting together a team of investors to make an offer for the social network. “It’s a great business and I’m going to put together a group to buy TikTok,” Mnuchin told CNBC.
Though just the US section of TikTok is likely unprofitable, the reach is wide enough to appeal to any willing investor.
However, it’s extremely unlikely ByteDance would ever give up such a major asset. Mnuchin himself admitted that “there’s no way that the Chinese would ever let a US company own something like this in China.”
TikTok’s source code, arguably its most important asset, is hidden behind a thick industrial secret. Given ByteDance’s proven connections with the Chinese Communist Party, they will likely never give up the source code to the United States.
Selling TikTok without the source code would be like “buying an F1 car without the engine,” Dan Ives said.
Mnuchin also thinks that Donald Trump would support the sale. Trump is currently the Republican candidate for the 2024 elections, running against Democratic leader Joe Biden again.
