TikTok Sold Cheaply to the US, Price Finally Leaked
Jakarta, CNBC Indonesia The deal to sell TikTok to a US owner is getting closer to reality. US President Donald Trump signed an executive order to support negotiations to acquire TikTok shares from ByteDance.
During the signing ceremony of the presidential decree on the sale of TikTok, US Vice President JD Vance also revealed that the deal valued TikTok’s business in the United States at US$14 billion (Rp 243 trillion). This share price was well below analysts’ estimates.
The Presidential Decree signed by Trump stated that the terms of the TikTok sale agreement negotiations were in accordance with the divestment law. The TikTok divestment law, signed by the previous US President, Joe Biden, requires TikTok to be owned by a US entity or be blocked. Chinese ownership is considered risky because the Beijing government could access the TikTok platform and its algorithm to spread misinformation, propaganda, and spy on US citizens.
However, according to Reuters, negotiations are still ongoing on several key points, particularly control over the algorithm.
“There’s resistance from China, but fundamentally, we want TikTok to continue operating, and we also want to protect the personal data of U.S. citizens in accordance with applicable law,” Vance said, as quoted by Reuters.
Trump stated that he and Chinese President Xi Jinping had agreed to continue negotiations.
“I spoke with President Xi. The conversation went well. I told him what we were doing, and he said go ahead,” Trump said.
The US$14 billion valuation of TikTok’s US business is significantly lower than that of TikTok’s owner, ByteDance. The value of ByteDance’s entire stock, based on the company’s employee stock buyback a few months ago, has exceeded US$330 billion (Rp 5,533 trillion).
According to Wedbush Securities analyst Dan Ives, TikTok will be valued between US$30 billion and US$40 billion by April 2025. This price projection represents the company’s business value without algorithms.
Reuters sources stated that Oracle and investment firm Silver Lake will own 50 percent of TikTok’s US business entity. US companies that currently own shares in ByteDance will own 30 percent. However, this share portion could change due to interest from other investors. Meanwhile, ByteDance’s ownership will shrink to below 20 percent.
The White House previously stated that one of TikTok’s seven US board members would be an American. ByteDance will fill the remaining board seat.
SOURCE : CNBC INDONESIA
