TikTok’s U.S. unit could be worth as much as $50 billion in a sale

Business tycoons like Elon Musk should be prepared to spend tens of billions of dollars for TikTok’s operations in the United States, should the parent company ByteDance decide to sell.

TikTok is facing a potential ban in the United States if the The Supreme Court decides to support a national security law in which service providers such as Apple and Google would be penalized for hosting the app after the Sunday deadline. ByteDance has not indicated that it will sell the US unit of the app, but the Chinese government he considered a plan in which X owner Musk will acquire the operations, as part of several scenarios under consideration, Bloomberg News reported Monday.

If ByteDance decides to sell, potential buyers will have to spend between $40 billion and $50 billion. That’s the assessment that CFRA Research Senior Vice President Angelo Zino has estimated for TikTok’s US operations. Zino based his assessment on estimates of TikTok’s US user base and revenue compared to rival apps.

TikTok has about 115 million monthly mobile users in the United States, which is slightly behind Instagram’s 131 million, according to an estimate by the market intelligence company. Sensor tower. That puts TikTok ahead Snapchat, Pinterest and Redditwhich have a US monthly mobile user base of 96 million, 74 million and 32 million, respectively, according to Sensor Tower.

Zino’s estimate, however, is down from the more than $60 billion he estimated for the unit in March 2024, when the House passed the initial national security bill that President Joe Biden. signed into law the following month.

The reduced estimate is due to TikTok’s current geopolitical situation and because “industry multiples have come up a bit” since March, Zino told CNBC in an email. Zino’s estimate does not include TikTok’s valuable recommendation algorithms, which a US buyer would not get as part of a deal, with the algorithms and their alleged links to China being central to the case of the US government that TikTok presents a threat to national security.

Analysts at Bloomberg Intelligence have their estimates for TikTok’s operations in the United States in the range of $30 billion to $35 billion. That’s the estimate they published in July, saying at the time that the unit’s value would be “discounted due to being a forced sale.”

Bloomberg Intelligence analysts noted that finding a buyer for TikTok’s US operations who can afford the transaction and deal with the accompanying regulatory scrutiny over data privacy will make a sale challenging. It could also make it difficult for a buyer to expand TikTok’s advertising business, they wrote.

A consortium of entrepreneurs including billionaires Frank McCourt and the president of O’Leary Ventures, Kevin O’Leary, made an attempt to buy TikTok from ByteDance. O’Leary previously said the group would be willing to pay up to $20 billion to acquire American assets without the algorithm.

Unlike Musk’s offer, O’Leary’s group’s offer will be free from regulatory scrutiny, O’Leary said Monday. interview with Fox News.

O’Leary said he is “a big fan of Elon Musk,” but added “the idea that the regulator, even under the Trump administration, will allow this is pretty slim.”

TikTok, X and O’Leary Ventures did not respond to requests for comment.

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