Here’s How Much Elon Musk Could Buy TikTok For—As China Reportedly Eyes Deal.
Topline: The world’s richest person Elon Musk would likely be looking at a price tag similar to what he paid for Twitter if a deal materializes to buy the American operations of TikTok, according to one well-known analyst covering Musk--as China reportedly mulls allowing a sale to Musk to prevent an all-out U.S. ban.
Key Facts
TikTok parent ByteDance would likely look for a sum of $40 billion to $50 billion for the U.S. operations of the hit app, Wedbush analyst Dan Ives wrote in a Tuesday note to clients, in the range of the $44 billion Musk paid in 2022 for Twitter, now known as X—and well above the roughly $20 billion bid made by the U.S.-led consortium Project Liberty last week.
The acquisition of the U.S. operations of TikTok would be a “golden asset pickup” for Musk and his social media company X, added Ives, who covered Twitter when it was a public company and now covers Tesla and the American technology industry at large.
Chief Critic
A TikTok spokesperson dismissed the idea of a sale to Musk as “pure fiction” in a statement to several outlets. Musk has yet to comment on the reports, which don’t mention whether Musk has expressed interest in such an acquisition.
Reports from Bloomberg and the Wall Street Journal on Chinese officials’ discussions about Musk are “not a total shock” given Musk’s tight relationship with President-elect Donald Trump, Ives added.
Key Background
TikTok will be banned Sunday unless ByteDance divests its U.S. operations to an American entity, though the Supreme Court will soon rule on an appeal to the ban and Trump—who has criticized the idea of banning TikTok—may be able to extend the deadline by 90 days after his Monday inauguration. About a third of Americans use TikTok, according to a June survey from Pew Research, topping the 21% using X. But concerns about TikTok’s China-based ownership—and whether the Chinese government could force it to hand over user data—led lawmakers to pursue a ban if ByteDance doesn’t sell the platform. Billionaire Frank McCourt, the former owner of the Los Angeles Dodgers, leads the Project Liberty bid for TikTok, while other American billionaires are closely involved in the high-stakes drama,including Jeff Yass, whose Susquehanna International Group firm owns a 15% stake in ByteDance.
Tangent
Musk’s electric vehicle company Tesla, his largest business, does a significant amount of business in China. About 23%, or $5.7 billion of Tesla’s $25.2 billion in revenue in its most recent quarter came from China. Ives mentioned Musk’s “strong relationship” with the Chinese government as bolstering his case with TikTok.
Forbes Valuation
Musk’s $421 billion net worth makes him more than $180 billion richer than any other human, according to our latest estimates. Musk’s 12% stake in Tesla and 42% stake in his aerospace government contractor SpaceX account for a majority of his fortune.
blogpay
Total Comments: 0