What is TikTok’s Worth, and Can it be Purchased in the US?

TikTok is facing a possible ban on January 19 because of a U.S. federal law requiring companies to separate from China-based parent ByteDance or cease operations in the country.

The U.S. Supreme Court ruled in favor of the law that would ban TikTok due to national security concerns associated with its Chinese ownership on Friday. To avoid a ban and maintain access for millions of U.S. users, experts say American ownership is crucial. But ByteDance has repeatedly said it has no intention of selling the platform.

TikTok’s Worth

Analysts estimate TikTok’s valuation at between $100-200 billion. Wedbush analyst Dan Ives states that the company is “well north of $100 billion,” and in a perfect world, “it could even be $200 billion” based on its proprietary algorithm.

But the Chinese government is not going to sign off on a deal that includes the algorithm. “Without the algorithm, it’s $40 billion to $50 billion,” Ives told The Associated Press, noting that TikTok, without its algorithm, would be far less popular worldwide.

According to ByteDance’s attorneys, separating TikTok technologically and commercially is impossible. They also argue that selling TikTok without its proprietary algorithm, which Chinese authorities might block, would isolate the U.S. version of the app from global content.

The U.S. officials have also expressed their concern that the algorithm could be manipulated by Chinese authorities to influence content subtly and undetectably.

Court filings indicate a potential shutdown of the service would mean a potential 29% drop in TikTok’s global advertising revenue within the next year, a Forbes report noted. Analyst Gil Luria pointed out that a spinoff would require TikTok to rebuild much of the infrastructure it currently relies on from ByteDance. He said the sale process and need to buy all of the platform, not just a part through an IPO limits the possible buyers.

Potential Buyers of TikTok

Many prominent figures and groups have shown an interest in acquiring the rights to buy TikTok.

Billionaire businessman Frank McCourt, while backed by an internet advocacy group, offered to buy TikTok, and investor Kevin O’Leary on Shark Tank joined the effort. In December, McCourt’s group stated that it had obtained commitments for more than $20 billion from investors but provided no further information.

He is the former owner of LA Dodgers and intends to restructure TikTok if acquired, making the latter an open-source protocol for providing users with greater control over their digital identities and data.

Former U.S. Treasury Secretary Steven Mnuchin has also expressed interest. Mnuchin said he has started gathering an investor group to pursue the purchase of TikTok, drawing on his experience with a 2020 effort during the Trump administration to help broker a deal under which Oracle and Walmart would take significant stakes in TikTok for national security reasons.

Names like Tesla CEO Elon Musk, YouTuber MrBeast (Jimmy Donaldson), and former Blizzard-Activision CEO Bobby Kotick have also been mentioned as possible buyers of the platform.

As TikTok navigates this critical period, its future in the U.S. hangs on ownership and regulatory decisions, with significant implications for its global operations.