TikTok's US Unit Could Fetch Up to $50 Billion

Imagine TikTok’s US operations being sold for up to $50 billion! That's a lot of money, right? Business bigwigs like Elon Musk might need to dig deep into their pockets if ByteDance, TikTok’s parent company, decides to sell. This could happen if the Supreme Court upholds a national security law that might ban TikTok in the US. But is ByteDance really thinking about selling? Well, the Chinese government has reportedly considered a plan where Elon Musk could buy TikTok’s US unit. Experts from CFRA Research think TikTok’s US operations could be worth between $40 to $50 billion. This is based on how many people use TikTok in the US and how much money it makes compared to other apps. TikTok has around 115 million users in the US, which is almost as many as Instagram. That’s more than Snapchat, Pinterest, and Reddit.

But times have changed since March 2024 when the estimate was over $60 billion. TikTok’s in a tricky situation because of politics and because app values have dropped a bit. Also, a US buyer wouldn’t get TikTok’s special recommendation algorithms. These are a big deal because the US government thinks they might be a security risk. Other experts at Bloomberg Intelligence think TikTok’s US operations are worth around $30 to $35 billion. They say it’s hard to find someone who can afford to buy TikTok and deal with rules about data privacy. This could make it tough for a new owner to grow TikTok’s advertising business. A group of rich people, including billionaire Frank McCourt and Kevin O'Leary, have even made an offer to buy TikTok. They’d pay up to $20 billion but without the algorithms. Unlike Musk, O'Leary thinks his group’s bid wouldn’t face much regulatory scrutiny.

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