(DailyDig.com) – The US government just passed a bill to either ban the social media app TikTok in the US or sell it to a US entity. The owner of TikTok, ByteDance, has stated publicly that it does not intend to sell the app.
On April 24, President Biden signed the law which states that ByteDance must sell TikTok in nine months to a buyer in the US. If they don’t sell the app by then, the US will remove it from its stores in January 2025.
According to sources familiar with ByteDance, the algorithms that power TikTok are the core of ByteDance’s operations, and they most likely won’t permit the sale of their proprietary algorithms.
On April 25, the parent company, based in Beijing, stated that they are looking into legal avenues in order to fight the legality of the law. If that fails, they would rather just remove their app from the stores themselves than sell it.
According to Shou Zi Chew, CEO of TikTok, they expect their challenge to the legislation to succeed. But if ByteDance does end up shutting down and removing their app from the US stores, it would not have a considerable impact on their business. The amount that the company would lose by banning TikTok from the US would only be a small portion of their overall revenue, according to an unnamed source.
Many investment bankers in the US claim that accessing the information needed to place a value on TikTok is difficult. The China-owned company does not publicly disclose its financial details, making it difficult to access its financials.
An additional unnamed source with knowledge of the parent company stated that in 2023, ByteDance’s revenues were almost $120 billion, which was $40 billion more than in 2022. Of the global revenues they receive, only 5 percent come from US TikTok users.
In December 2023, ByteDance attempted to buy back shares from their investors that were worth $5 billion. At that time, the value of the company was $268 billion.
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