The TikTok fiasco gets more convoluted, as a Wall Street Journal report claims that Twitter might be in talks with ByteDance for a possible merger.
TikTok, one of the fastest growing social media platforms in the entire world has attracted scrutiny from governments throughout the world. Accusations have primarily revolved around stealing customer data and being in cahoots with the Chinese Communist Party. And even though parent company ByteDance vehemently denied these accusations, Tiktok’s largest outside-China market India, banned the platform, along with 58 other apps.
With the former largest market out of the equation, U.S. became TikTok’s latest most crucial demographic, and the company has been trying to evade a possible ban through any means necessary. But then came the much rumoured executive order from President Donald Trump, banning US based entities to do any transactions with Bytedance as well as WeChat.
The order however has a 45 day time-period, allowing some breathing room for TikTok to seek possible options. One such option of course is Microsoft, which is in advanced stages of a possible acquisition. The offer apparently has Trump’s blessing as he is not object to a U.S. company buying off the platform as long as it is a 100% acquisition.
However, he set a deadline of 15th September, and asked for a major chunk of the deal (around 30%) for allowing the acquisition to happen in the first place. Thus, up until now everyone was under the impression that TikTok had two routes-Either sell its operations to Microsoft or loose its latest biggest market. That is, until Twitter got into the mix.
WSJ reports that Twitter and Bytedance have had preliminary talks about a merger of TikTok’s US operations with the publicly traded social media company. While the Microsoft deal would merge TikTok’s business for US, Australia, Canada and New Zealand with Microsoft, Twitter will limit itself to smaller fish and will just acquire the company’s North American business.
Now, Twitter will obviously have to invite other entities if it plans to pursue a deal, since TikTok-a company that has been valued to $50 billion, far surpasses the financial capabilities of Twitter, which has a $29 billion market capitalization.
While there are only 2 contenders for TikTok as of yet, many more might show up before the 15 September deadline is over. Moreover, the company might protest the executive order on the grounds that it does not follow due process and that the underlying argument that TikTok poses a national security threat is baseless. In fact, National Public Radio reported that TikTok is already planning to do so.