Much has been happening on the TikTok front ever since the Trump Government imposed a ban on it. The Chinese app has gained much traction ever since it announced its acquisition plans. The widespread use and popularity of TikTok makes it one of the most lucrative apps of the 2020. Clearly a lot of CEOs are smart enough to see the opportunity and try to gain ownership of something that will add millions of dollars to their bank accounts. TikTok is literally on auction. Let’s explore who all are in the race and who might win the TikTok acquisition game.
But, before we jump into the main section, allow us to give you an overview of the drama.
A situational overview
The growing tension with the Coronavirus and China’s inability to handle it has disturbed government leaders of the world, especially India and America. In an act of revenge, India banned 50 Chinese apps early July and US recently.
The executive order from the Trump administration reads: “The spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China continues to threaten the national security, foreign policy, and economy of the United States. At this time, action must be taken to address the threat posed by one mobile application in particular, TikTok.”
Weeks after the order, the company ByteDance proposed full sale of the US operations to any interested American company. This will also ensure that local user data stays in the hands of the domestic American company.
Who all are in the race of TikTok acquisition
The first bidder to show interest ever since TikTok rolled out its acquisition plans was Microsoft. Microsoft acknowledged the plan and clarified that it was pursuing a deal to acquire TikTok for 4 locations: US, Australia, Canada, New Zealand.
According to CNBC, the deal could go as high as $50 billion. President Trump had hinted that the US government should also receive a substantial portion of the transaction, if the deal is struck.
Another actively participating bidder that has recently emerged is Twitter. The company is said to have completed the preliminary talks with ByteDance.
Market leaders, however, speculate Twitter’s capacity to bid such a huge sum, since its own market valuation stands at $29 billion.
Netflix (proposed buyer)
The video streaming giant is not reportedly in the race, but everyone is questioning why it shouldn’t. Netflix can afford it, and TikTok is a jewel asset. The user base of Netflix saw a strong upward trend ever since countries went on lockdown due to the pandemic. Buying TikTok would give them control and rule the social media industry as well.
Google (proposed buyer)
Google’s parent Alphabet has a history of acquiring any emerging company and TikTok is no different. The established user base and worldwide popularity would offer a strategic advantage.
Who might win TikTok acquisition
Microsoft’s exact status of the deal is yet to be known, but the humongous bid price and Microsoft’s high market valuation definitely gives it the upper hand among other bidders.
It’s a far too big bite for Twitter, but its investors may support it to raise the money required.
Whoever gets the deal, it will quickly add a large user base and millions of dollars to their accounts.
What are your thoughts on this? Who do you think will acquire TikTok? Or do you think some other brand than the ones mentioned above are more deserving? Please go ahead and put your thoughts in the comment section.