TikTok Considers Sell-Off to Appease Concerns Around Ownership Conflicts

With TikTok facing a potential ban in the US, the corporate is already engaged on contingency plans, which, in a worst-case state of affairs, might even see mother or father firm ByteDance dump TikTok with a purpose to keep its operations and income potential.

As reported by Bloomberg:

“TikTok’s leadership is discussing the possibility of separating from ByteDance, its Chinese parent company, to help address concerns about national security risks. A divestiture, which could result in a sale or initial public offering, is considered a last resort, to be pursued only if the company’s existing proposal with national security officials doesn’t get approved, according to people familiar with the matter.”

That’s the same path to what TikTok was nearly compelled into again in 2020, when then President Donald Trump called for the app to be sold into US ownership, or face a full ban.

The Biden Administration finally abandoned those plans, which, at one stage, had Microsoft and Oracle because the entrance runners to buy the app. However now, amid rising issues from cybersecurity specialists, and growing tensions with the Chinese language authorities, The White Home might as soon as once more be near pushing TikTok into drastic motion.

Although even that might not be a viable path. The Chinese language Authorities would nonetheless have some say over say such motion, and must approve the sell-off – which, given its numerous statements on the actions taken towards TikTok to date, it might not be keen to do.

Final month, in response to the rising bans of TikTok on government-owned gadgets within the US, Chinese Foreign Ministry spokesperson Mao Ning said that:

“[The US government] has been overstretching the concept of national security and abusing state power to suppress other countries’ companies. How unsure of itself can the US, the world’s top superpower, be to fear a young person’s favorite app to such a degree?”

This has been a typical chorus from the CCP, that the US shouldn’t have the ability to easily cancel a Chinese language-owned app with out clear cause for such.

It appears doubtless that the CCP can be none too happy a couple of compelled sell-off of a Chinese language asset for a similar cause – so even when TikTok and ByteDance had been to discover this avenue, it nonetheless might not be attainable below the present course of.

Actually, the following stage for the app hinges on the looks of TikTok CEO Shou Zi Chew before the US House Energy and Commerce Committee, which is able to occur on March twenty third, the place Chew can be questioned concerning the app, and the capability for information sharing with Chinese language-based teams.

If Chew’s solutions fail to win over US senators, then you’ll be able to guess that the requires a TikTok ban will get even louder, whereas one other spy balloon-type incident might be all that’s wanted to pressure President Biden’s hand – and Biden does now have the power to ban the app, if he sees match.

It appears doubtless {that a} compromise, of some sort, will should be met, however the tense environment round US-China relations doesn’t bode nicely for the app, because it presently stands.

I might nonetheless guess on TikTok persevering with on in some kind, however as famous, there are numerous parts at play that might certainly see it gone earlier than the 12 months is out.