As TikTok’s future hangs in the balance, billionaires are preparing their bids to buy it up and make it wholly American.
In April a new law decreed the Chinese-owned video sharing app had to either be sold by owners ByteDance or face being banned in the US altogether over concerns as to how it uses people’s data.
The Supreme Court is hearing final appeals in January but “It’s not looking good for TikTok,” according to Joel Thayer, tech policy lawyer and president of the Digital Progress Institute.
However, the potential sell off creates a huge ‘app-ortunity’ for US investors. Frank McCourt, CEO of investment firm McCourt Global, told NYNext, “We’ve been building the technology for five years… we have the capital and the technology and can now make it a better experience for TikTok users.”
If TikTok is sold, ByteDance has already said the ultra-addictive algorithm that keeps users hooked on the app will not be part of the sale.
Any potential buyer would get the brand name, a video library, and a user base of millions — but have to create the algorithmic technology from scratch.
McCourt sees this as a way to rebuild apps like TikTok in an open-source way, allowing people to own their data. He invested $100 million into Project Liberty in 2021 with a view to achieving that. “I’ve met with twenty major influencers on TikTok — we just had dinner in Malibu. They’re excited at the prospect of owning their audience,” he added.
Shark Tank judge Kevin O’Leary is also interested in acquiring TikTok and seeking support from small business owners on the platform through a crowdfunding effort — trying to get together a bid which doesn’t lead the app to be owned solely by multi-billion dollar corporations.
Participants can invest as little as a thousand dollars for a small equity stake in the company. “The buyer will probably be a combination of syndicates and I’ve been in narrative with almost all of them… we could join together,” Kevin O’Leary told NYNext of how he is preparing for TikTok’s possible sale.
He’s also ambitiously looking beyond US borders to potentially link up with the world’s most populous country, India, which has also banned TikTok.“First thing, I’ll fly to India and talk to [Prime Minister] Modi… they can partner with us,” O’Leary explains.
Both men see the opportunity to rebuild the algorithm from scratch as an opportunity to create a new kind of platform that would give users more control — and curb China’s ability to spy on American users.
The price of TikTok is still unclear, but potential buyers say it will be much cheaper without the algorithm. “There’s not a chance in hell it’s worth even $35 billion without the algorithm,” O’Leary adds.
Both he and McCourt say they have the funds to get a deal done. However, any sale would have to be approved by China’s Commerce Ministry – presenting further potential roadblocks along the way.
One potential investor who could have an advantage on that front is Bobby Kotick, former CEO of video game behemoth Activision Blizzard. Kotick is close with Elon Musk, has experience building and running a technology giant and has deep relationships with current investors in ByteDance.
This story is part of NYNext, a new editorial series that highlights New York City innovation across industries, as well as the personalities leading the way.
However, sources close to him say he is far more cautious about publicly touting a bid — at least until the Supreme Court announces their ruling.
In 2020 a deal was struck for Oracle and Walmart to buy 20% of TikTok, but it was never completed. Both have remained tight-lipped over the potential of entering the bidding this time around, but Walmart CEO Doug McMillon has maintained contact with ByteDance, according to sources.
Other tech behemoths like Meta and Apple won’t be eligible to bid for the platform, as it would be seen as an antitrust violation, sources add.
Former Treasury Secretary Steve Mnuchin has previously said he was interested in purchasing the app — with backing primarily from Saudi Arabia — but has stepped away from a possible bid, sources add. Interested backers say they are focused on raising money exclusively from US buyers.
“This will be something that is purchased with only domestic money,” one source involved said.
One figure who will likely play a key role in the sale is President-Elect Donald Trump.
As The Post reported earlier this week, Trump wants to keep his pledge to “save” TikTok and still address the national security concerns from congress by helping to broker the sale.
Possible buyers are confident about that, too. McCourt adds, “Trump is a dealmaker.”
