Ticking down
The bloodbath in the markets yesterday hit companies far and wide, though one popular tech firm is still getting a lot of love. The bidders for Chinese-owned TikTok (BDNCE) are piling up ahead of a Saturday deadline to reach a deal for the short-form video app or risk being banned in the U.S. Even if a full deal is not announced, a framework for one will likely be put in place, and Trump could direct the DOJ not to enforce a ban so the app stores of Apple (AAPL) and Google (GOOGL) wouldn’t be punished for downloads.
Flashback: In his first term, it was Trump who sought to ban TikTok and force a sale of its U.S. business to an American company, and while a transaction with Oracle (ORCL) almost went through in 2020, the lawsuits piled up and an injunction was granted to prevent the app from being outlawed. The Biden administration later revoked the planned ban, but their positions on the matter subsequently reversed following a national security review. President Biden signed the PAFACA Act last April, which effectively banned TikTok in the U.S. by 2025 (unless it was divested), while Trump later vowed to “save TikTok in America” on the campaign trail and extended the deadline when he took office.
Meet the bidders for TikTok, which has 170M users in the United States:
Larry Ellison’s Oracle
Andreessen Horowitz and Blackstone
Amazon / Microsoft / AppLovin
Frank McCourt, Shark Tank’s Kevin O’Leary and Reddit’s Alexis Ohanian
OnlyFans founder Tim Stokely’s startup
AI search startup Perplexity AI
Former Treasury Secretary Steve Mnuchin
Video platform Rumble
Tech group led by YouTuber MrBeast and Roblox CEO
What’s at stake? In terms of fair competition, China does not allow any U.S. social media companies to operate in the country, though there are additional forces at play. They revolve around the significant policy shift in how to deal with Beijing and the evaluation of what capabilities should be ascribed to the CCP. What started as a crusade against intellectual property theft has morphed into accusations of mass surveillance and algorithmic propaganda manipulation to influence an entire generation of American youth. Unfair practices and trade are also center stage, with Trump stating he could relax hefty tariff rates on China in order to get a TikTok deal done.
#Deal #TikTok #Sight