The Takeover Bid of TikTok Is Valued at $50 Billion

by Kay Lee

Investors of TikTok’s China-based parent company ByteDance are looking to acquire TikTok, the short-form video social media app. They have estimated the video service at $50 billion.

ByteDance, which owns TikTok, is under US pressure over US government concerns about personal user data processed by the Chinese company. Due to the trade war between the countries, ByteDance risks being blacklisted by the US authorities. In such a case, TikTok will not be able to work in the country. At the moment, the Chinese company is considering several options of how the situation may develop.

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To avoid TikTok blocking, some American investors, including Sequoia and General Atlantic, have offered ByteDance to transfer a majority stake of video service for $50 billion. Their offer is 50 times higher than the projected profits in 2020.

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It is not yet known how the ByteDance management team reacted to this offer, but, according to sources in the company, the projected value of TikTok exceeds $50 billion. TikTok is developing very rapidly, and its owners expect to earn $6 billion in 2021. Earlier this year, during a private deal to sell a small stake held by Cheetah Mobile Inc., ByteDance was valued at $140 billion.

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If a TikTok-wide deal cannot be reached, ByteDance is also considering selling only the service's US divisions. The cost of such an agreement was not specified.

There is also another scenario in which a separate holding company for TikTok will be created with an independent board of directors.