The US wants TikTok out, TikTok wants to buy time, and Elon Musk’s X smells an opportunity. Pass the popcorn.
The world is watching as the US and China go head-to-head over… a social media network. And the stakes are HIGH:
- TikTok has 170 million users in the US and 7 million business accounts.
- It says it added $8.5 billion to the US GDP in 2023.
- But China holds a “golden share” in TikTok’s parent, ByteDance, which means it has a say in strategic decisions like M&A.
With the 19 January deadline for a US ban looming, here’s how the drama could play out:
TikTok goes dark
As things stand, TikTok goes offline this Sunday.
That means if you try to download TikTok on your phone after the 19th… it won’t be possible. Google and Apple will pull the app from their stores. While existing users will still have access, without updates or tech support TikTok will slowly become unusable.
Users are likely to turn to Instagram and YouTube Shorts instead. Meanwhile, other Chinese apps like Xiaohongshu and ByteDance’s Lemon8 — currently topping download charts — are waiting in the wings to soak up the spillover.
But there’s more at stake. Meta and Alphabet’s shares could get a boost, advertisers will face chaos, and TikTok’s 7,000 US employees? They’d be left wondering what’s next.
It’s deja vu for ByteDance, which shut down operations in India after a similar ban in 2020.
And let’s not forget Oracle, TikTok’s cloud vendor, which stands to lose a hefty slice of revenue. Ouch.
A TikTok-less world might make some competitors happy, but it’s a messy breakup nobody’s really ready for.
Read more: Musk turbocharging X with TikTok link-up? Not so fast, says TikTok
Band-aid
In this version of events, TikTok dodges the axe — at least for now.
Maybe President Joe Biden steps in with an extension, kicking the ball into Donald Trump’s court, or the Supreme Court delays the ban. Either way, the app lives to fight another day.
What happens next? ByteDance might keep pushing its $1.5 billion “Project Texas” to prove TikTok’s data is safe and sound in US hands. (Basically, reassuring everyone that TikTok’s not a security threat.)
But here’s the catch: while TikTok fights to survive, users could start drifting to other platforms. Either way, it would be an uncertain time for Meta and Snap Inc shares.
Read more: The metaverse is Big Tech’s big flop. Can it make a comeback?
Eleventh-hour deal
The unlikeliest, but most dramatic outcome is an acquisition of TikTok’s US ops.
Who’s buying? Oracle and Walmart were interested before. Microsoft’s name is floating around. Musk? He’s the wildcard.
A Musk deal has been making the biggest noise of late.
Such a sale would face immense logistical and regulatory hurdles, including valuation disputes and national security reviews.
TikTok’s US operations, with estimated revenue of $20 billion in 2025, carry a theoretical valuation exceeding $100 billion.
Wall Street would scrutinize the acquirer’s ability to leverage TikTok’s assets while managing regulatory risks.
Read more: #Snapshot: Don’t mess with Elon
Bank of America analyst Justin Post says a TikTok ban has been kinda priced in for Meta and Snap. If it turns out to be a sale to a US buyer like Musk, it would be modestly negative for these stocks.
And let’s not forget, any sale needs Beijing’s blessing because of its control over ByteDance. So, a sale would be as messy as other scenarios.
If TikTok’s gone, Meta and Alphabet gain. If it stays, TikTok gets a fighting chance but with more hurdles. And if someone buys it? Well, get ready for a blockbuster sequel because this drama is far from over.
Edited by Thyagu Adinarayan and Lin Noueihed. If you have any tips, ideas or feedback, please get in touch: talk-to-us@moniify.com
