TikTok Bidding War? Mnuchin, Kotick Emerge As Potential Buyers

ByDharmendra Kumar

The House of Representatives on Wednesday voted in favor of a bill that would force ByteDance to either sell TikTok or face a ban in the U.S.

The bill now moves up to the Senate and, if passed there and signed by President Joe Biden, ByteDance will have five months to sell the company, or TikTok will be removed from all app stores across all formats.

The whole affair is predicated upon the notion that TikTok, because of its Chinese ownership, represents a national security threat – both in terms of the data it could potentially share with the Chinese government, and the misinformation it could spread across western democracies.

But what if the company was in U.S. hands?

Mnuchin Announces Intent To Buy

Enter two possible contenders. A group led by former Treasury Secretary Steven Mnuchin and a rival group potentially led by Bobby Kotick, former CEO of Activision Blizzard.

Following Wednesday’s House vote, Mnuchin appeared on CNBC and told presenters that he was putting together an investment group to buy TikTok.

“I think the legislation should be passed and I think it should be sold. I understand the technology, it’s a great business and I’m going to put together a group to buy TikTok,” Mnuchin said.

“It should be owned by U.S. businesses,” he said. “There’s no way the Chinese would ever let a U.S. company own something like this in China. I’ve spoken to a bunch of people – I can’t tell you who right now – but it would be a group of investors that controlled this.”

KotickTok?

Meanwhile, the Wall Street Journal reported on Monday, citing a person familiar with the matter, that Kotick has already been wooing ByteDance co-founder Zhang Yiming.

The price tag would likely be in the hundreds of billions of dollars and both Mnuchin and Kotick would need backers with extremely deep pockets.

Again, according to unnamed sources, the Wall Street Journal claims Kotick floated the idea at a conference last week to a number of high rollers that included OpenAI CEO Sam Altman – which would give the Microsoft Corporation (NASDAQ:MSFT) and OpenAI partnership the platform they need to compete on terms with Meta Platform Inc.’s (NASDAQ:META) Facebook and Instagram.

Expert Reaction

Andrew Curran, an artificial intelligence expert and writer,

on X: “Bobby Kotick is reportedly seeking partners for an American acquisition of TikTok. The deal would be valued at hundreds of billions of dollars. Considering the immense source of training data TikTok represents, there’s likely to be interest from all major players.”
Author and broadcaster Brian O’Sullivan also

on X: “Steven Mnuchin said he wants to buy TikTok. Yeah, that’s just what the kids want. Some old, humorless, white finance guy running TikTok.”
If a bidding war is looming, it could certainly add many dollars to the eventual sales price of TikTok, should ByteDance opt for the sale.

Daniel Ives, tech analyst at Wedbush, said: “In our view this is all a game of high stakes poker that has a broad negative ripple impact for US/China relations with a House Bill that remains a major head-scratcher.”

He added: “While the price tag will be eye-popping, TikTok’s strategic value and consumer platform will have a number of financial and tech strategic players interested if a sale becomes the formal path.”

Ives also noted private equity consortiums might emerge to offer rival bids, while some of the existing major tech players might show interest.

The fate of TikTok is not yet sealed. It’s not highly unlikely that the Senate will vote the bill down, presenting the rival argument against national security, that free speech is more important.

But it has underlined the great value assigned to TikTok – not only in financial terms but in terms of its users.

One of the main arguments presented in opposition to the bill in the House debate that preceded the vote was about the Americans who use TikTok for work. Those who monetize their posts on the site, and those using it to promote their businesses – small businesses: the backbone of the U.S. economy.

Date Firm Action From To
Jul 2020 Desjardins Initiates Coverage On Buy

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However, the documents uploaded by the poll panel do not mention the serial numbers of the bonds, which would have allowed for matching the entities that donated funds with the political parties that received them. The poll panel said it has uploaded the data on an “as is where is basis”. The information can be accessed on this link. The data has been uploaded in the form of two documents. One of them contains information on the dates on which electoral bonds were purchased, the entities that purchased them and the denominations of the bonds. The other one has information about the dates on which electoral bonds were encashed, the political parties that encashed them and the denominations of the bonds. Details about electoral bonds purchased from April 12, 2019, to January 11 have been made public. The polling body has uploaded details of denominations of electoral bonds encashed between April 12, 2019, and January 24. The Election Commission uploaded the data on its website in compliance with a Supreme Court judgement passed on February 15. On that day, the court struck down the electoral bonds scheme as unconstitutional, and said they could lead to quid pro quo arrangements between donors and political parties. The Supreme Court had directed the State Bank of India to issue details of the political parties that received electoral bonds from April 12, 2019, and submit them to the Election Commission by March 6. However, after the verdict, the bank had approached the court seeking that the deadline be extended till June 30. On Monday, the court dismissed the bank’s petition and told it to send the data to the Election Commission by March 12. The State Bank of India sent the data to the poll panel within the deadline. A total of 22,217 electoral bonds were purchased and 22,030 were redeemed by political parties between April 1, 2019, and February 15, 2024, the bank told the Supreme Court. Electoral bonds were monetary instruments that citizens or corporate groups could buy from the State Bank of India and give to a political party, which then redeems them. The entire process was anonymous since buyers were not required to declare their purchase of these interest-free bonds and political parties did not need to show the source of the money. Only the total amount received through the electoral bonds is revealed to the Election Commission through the audited accounts statements. The scheme was introduced by the BJP-led Union government in 2018. The Centre, however, had access to information about the donors as it controls the State Bank of India. ‘SBI is lying’: Why banking experts dispute its claims on electoral bonds data

ByDharmendra Kumar

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