TikTok’s Options Grow As China Demands To OK Deal

As the clock ticks on a possible sale of TikTok USA, the options for parent company ByteDance could be growing. China has thrown a curve ball into the mix by threatening to impose new restrictions on the export of artificial intelligence (AI) technologies, which would potentially require approval of a sale by regulators in that country.

Suitors include Microsoft, which is now teaming with Walmart on an effort to buy TikTok’s U.S. headquarters in Culver City, California, and the company’s operations in Canada, Australia and New Zealand. Oracle has also laid out a competing bid that includes venture backers like Sequoia Capital.

Earlier this month, President Trump issued an executive order banning U.S. companies from doing business with ByteDance. He argued this was necessary for national security, to prevent TikTok from turning over U.S. user data to the Chinese government.

Trump has alleged the app poses national security risks because the company could pass along data about users to the Chinese government. Now, TikTok faces a Sept. 15 deadline to sell its U.S. operations.

Bloomberg News reports that China’s regulatory move has ByteDance Founder Zhang Yiming reconsidering his options. The company’s deal negotiators are meeting with its regulatory experts to hash out whether it’s even possible to satisfy the demands of both the U.S. and Chinese governments.

Besides all that, there’s simply arriving at a price with potential buyers. Reportedly, the deal could be worth in the range of $20 billion to $30 billion.

According to Bloomberg, while negotiations are proceeding, it’s still possible Zhang will not actually sell his U.S. operations. He could also negotiate a deal with an acquirer, then not complete the transaction because of government demands.

Simply put, there are other money-making moves that Zhang could make. Already, privately held ByteDance is now worth $140 billion, according to startup tracker CB Insights. Bloomberg said the company is estimated to have made more than $3 billion in net profit off of more than $17 billion in revenue in 2019.

As a result, investment bankers have started coming around to pitch ByteDance on having an initial public offering (IPO) of stock .