The Top 3 Front Runners To Buy TikTok

This likely leaves Bytedance (TikTok parent) only one option, a sale of its U.S. operations.

By The Insider

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The terrain for TikTok moving forward has become quite rough as the company has already been banned for use by government officials worldwide with an absolute ban on the agenda in many countries.

Security Concerns Lead To A Potential Sale To Control Data

Security concerns have been the primary concern for nations worldwide as the TikTok mobile app behaves as an intrusive data mining machine, often mining data without the consent of app users. The app collects information like:

Email addresses and phone numbers
Keystroke patterns, battery levels, and audio settings
Mobile carrier, wireless connections, and browsing history
Ways of consuming data, searches, apps, filenames and filetypes, and location
Contents of messages, times they are sent, received, and read
Photos of documents or places that are stored on your cellphone

This has caused the United States (U.S.) to force a sale of TikTok’s American business within 6 months or have it banned from the Apple and Google play stores in the country (as per the U.S. House of Representatives vote). To go further, a complete ban from the play stores would likely be echoed by other developed nations based on the fact that most have followed the U.S. in banning the app’s use among government officials. This likely leaves Bytedance (TikTok parent) only one option, a sale of its U.S. operations.

The Top 3 Front Runners To Buy TikTok

It’s a very short list of companies that could even afford to buy TikTok, let alone incorporate them into their company operations. For starters, the companies in question would need to have at least $100 billion in cash sitting on the balance sheet, according to Dan Ives (Wedbush analyst); it’s likely that the last thing the U.S. government would want is to give Bytedance $100 billion in stock of a major U.S. tech company.

The suitors include Amazon, Apple, and Alphabet in that order, it’s very unlikely the FTC would allow Meta Platforms to make a bid due to their monopoly in social media. Although Amazon doesn’t have heavy cash balances like Apple and Alphabet, the company could likely fund the purchase by selling a bond or additional shares in combination with cash on hand. Amazon also doesn’t currently have any foot in the social media space, unlike Alphabet (YouTube), so an Amazon purchase is likely to pass the FTC without many hurdles.

Furthermore, TikTok is moving into shopping through app videos which is likely something that Amazon could help expedite through leveraging its technologies and operations. Alphabet sits at a distant third and highly unlikely suitor because of its dominance in video social media, YouTube, which would draw some scrutiny from regulators. Apple sits somewhere in the middle because although they don’t have a social media platform, they have a reputation for user privacy, which could cause a disturbance between the two company cultures.

Looking forward, markets will be patiently awaiting the arrival of the House TikTok bill in the Senate. However, there’s no certainty that the Senate will take up the House bill, or provide an alternative. That sentiment is quite alarming when one considers that the House passed the bill by an overwhelming 352-65 in favour.